Wine Tariffs Threaten our Very Existence!

Jenny and Quentin Beaufort with their two daughters- just one of the many non-economic but very real benefits of free, unregulated trade! Photo credit: James Robinson

“I spent 20 years of my life building a successful business, and in one signature the Trump administration could make it all crumble. We will know on January 14 if yes or no, everything we have built will be destroyed. This will affect a huge portion of the wine industry, from importers to distributors, wine shops to restaurants, European wineries, to in fact American wineries who won’t have nearly as many stores to sell to. Trump will wipe out the small businesses he pretends to support. This is about a disagreement over aircrafts and tech companies. But it will end up devastating many American families including mine, as well as those of my employees. Please put a comment on the government website and you can also call your senator’s office to complain (202.224.3121 will get you to the government switchboard). It can’t hurt. “

–Jenny Lefcourt

The administration is now proposing 100% Tariffs on all Wine (and other various products*) from the European Union.

 These tariffs are really without precedent, but to glimpse a window on the possible disastrous consequences, we could examine the 1930 Smoot Hawley Act. History teaches us that this act hastened the arrival of the Great Depression, extended its length, led to a 65% downturn in global trade, and made imported goods a luxury item only affordable to the top 1% of the American population. What’s more, those tariffs were only between 40-48%, not the 100% tariffs currently in discussion. Smoot Hawley is the reason most of the world’s leaders today favor unregulated free trade.

If you agree with us and want to do something to help, the government is accepting comments until January 13, 2020. You can also contact as many of these people as you can and tell them how you think 100% tariffs on these products might affect your life negatively:

UPDATE: When commenting to the regulatory agency, a form letter is not recommended, see these guidlines here:

In terms of contacting representatives, these actions are most likely to be effective:

WINE TRADE MEMBERS — WRITE YOUR CONGRESS

We have drafted two letters for you to send to your Senator and Congressional Representative. Below are two separate links that will take you to a page that let’s you send those letters in just 30 seconds. We urge you to do so as soon as possible:

Click to Email Your U.S. Senator — https://account.votility.com/enterprise/NAWR/ec/695

Click to Email Your U.S. Congressional Representative—

https://account.votility.com/enterprise/NAWR/ec/696

WINE TRADE MEMBERS — WRITE THE U.S. TRADE REPRESENTATIVE

It’s critical that the U.S. Trade Representative in charge of the tariff process hear from those impact by the proposed 100% tariffs on European Union wines. Below is a link that will take you to the page on which you can place comments. Also below is proposed wording that can be copied then pasted into the box provided for your comment.

Click To Email the U.S. Trade Representative

https://www.regulations.gov/comment?D=USTR-2019-0003-2518

1. Copy the letter below in italics.
2. Click on the link above.
3. Then paste the letter into the box provided. Please note the two places in the first paragraph where you need to insert the name of your company and when it was founded. If you are a wholesaler or importer change the appropriate word in the first sentence.

The Honorable Robert LIghthizer

Executive Office of the President

600 17th Street, NW

Washington, DC 20006

RE: Opposition to Tariffs on Imported Wines From the European Union

Dear Amb. Lighthizer:

I am writing on behalf of (LIST COMPANY NAME & LOCATION) a family owned wine retailer that has served the community and our customers since (YEAR) Over the years, we have successfully provided an array of beverage choices for our customers including fine wines from the United States and abroad.

Beginning on October 18, 2019, the U.S. Government imposed a 25-percent tariff on certain French wine as part of retaliatory tariffs against the European Union (“EU”) after the World Trade Organization authorized retaliation for the EU’s failure to comply with WTO rulings on subsidies provided to Airbus.  I understand that a 100-percent tariff is proposed on French sparkling wine (consisting mostly of champagne) and that this tariff is part of the Section 301 duties imposed on imports from France as a result of the country’s Digital Services Tax (“DST”). Finally, on December 10, 2019, USTR proposed imposing tariffs of up to 100 percent on all wines from the EU. 

As a small business and member of the wine trade we oppose these tariffs because we believe they will place a terrible burden on our business and customers, and because adding tariffs to wine is an ineffective way to pressure the E.U.  The initial tariffs on French wine have already reduced our sales during the holiday season and additional tariffs will result in laying off about a quarter of our workforce in the industry over the next year.  Thousands of jobs will be lost at the retail level, with thousands more at wholesalers and importers. Further, wine from the historic wine regions of the E.U. cannot increase their supply, and the demand for those products far outstrips supply. Much of the wine the U.S. would no longer be able to purchase would simply be purchased by our overseas competitors, thus putting little pressure on the E.U. to change policy. Wine is now a global commodity. The long-fought, hard work of the U.S. wine industry has given U.S. businesses preferential access to the most valuable supplies of wines in Europe, and we sell them all over the world. The tariffs would take U.S. businesses out of this lucrative market, enabling our adversaries in growing markets – particularly China – to take over our important trade partnerships. The proposed tariffs would cause tremendous long-term damage to these partnerships, in addition to seeing large numbers of job losses in the U.S., while putting minimal pressure on the Europeans to change.

We also ask you to understand, much of the wine industry is bound by various laws to sell essentially only wine and spirits. Many of our businesses make up to 100% of their revenue off of wine alone, meaning we cannot spread out the pain, and simply sell more products from another category to make up for what would be staggering losses in sales revenues caused by tariffs on wines. Further, U.S. wine growers could not possibly increase supply quickly enough to take the place of the lost sales of imported wines before irreversible damage was done, with huge numbers of small businesses being destroyed. Our company and employees ask you to recognize the importance of the economic contributions made by the wine retail and wholesale community, and to understand the devastating impact these proposed tariffs would have on our industry, as well as the adverse affect it would have on consumers. Given the tremendous damage these would cause, combined with the ineffectiveness of wine tariffs in encouraging the E.U. to change their practices, we ask you to look for more effective ways to encourage the Europeans to change their behavior, that would do less harm to U.S. Business and consumer interests. 

The proposed tariffs on wine would bring tremendous destruction to an entire U.S. industry, an industry that had nothing whatsoever to do with the problems at hand. Appropriate tariffs should target Airbus and their suppliers who benefitted from the subsidies or French digital services companies.  Please do not make our small business collateral damage in someone else’s war.

·         Contact your elected officials: https://www.usa.gov/elected-officials
·         Contact industry trade organizations:
 

 

*You can see the full list of products under consideration here: https://www.govinfo.gov/content/pkg/FR-2019-12-12/pdf/2019-26741.pdf