Wine Tariff Explainer and Actions
Jenny’s NY Times article, explaining the issues.
Handy Infographics to help explain the Tariffs are here.
Time is of the essence. Action this week!
Comments can be posted on the government website until January 13, so please comment today on large civil aircraft dispute tariff here, and on proposed digital service tax here.
Borrowing from Christy Frank’s nicely put together list of actions:
First, an important note: From everything I have been told, FORM LETTERS DO NOT WORK. I have links to a couple sample letters, but if you’re going to take the time to respond, please take just a few extra minutes to customize the letter to your own specifics. It won’t take long and it will make all the difference.
TIMING
Time is of the essence. There are two separate trade disputes happening, with details below with comments closing on the January 13th and 14th. So this isn’t a “wait until next week” sort of thing. If you’re going to send emails, make calls, or even just want to catch up on what this all could mean, then DO IT NOW! Like NOW NOW.
THE CONTEXT
All of these responses are meant to be politically neutral. The issue is not SHOULD we leverage tariffs, the issue is HOW we do it. In both disputes discussed below, the battles of large multi-national companies (Apple, Google, etc.; Boeing vs. Airbus) are being fought using the jobs and livelihoods of small, family-owned American businesses. This is perhaps an unintended consequence, but it’s a consequence nonetheless.
Trade disputes often focus on symbolic goods, and in Europe, wine (and spirits and food) has major culture significance which makes it an easy target. Unfortunately, the impact would not be felt in Europe, it would be felt HERE, in the United States. American jobs and tax revenue would be lost throughout the wine (and spirits and food) supply chain, with small- and medium-sized especially at risk.
The wine industry’s supply chain, with its legally mandated three-tier system, doesn’t have easy parallels to other industries. Its structure means that a disproportionate burden of the tariffs will fall on small family businesses and its strict regulations and the very nature of wine give us very little room to pivot. So we aren’t just making a case for why jobs shouldn’t be lost – we’re trying to educate everyone as to why it’s inevitable.
THE DETAILS
There are two distinct trade disputes happening. Summaries are below, but you can click on the links to see the full details AND the full list of products at risk of tariffs up to 100%. It’s not just wine, but a wide range of specialty foods and other products. The background pieces are from the BBC so they are as free of bias as possible.
- The Digital Services Tax
- Companies affected by the tax in dispute: Google, Apple, Amazon, eBay, etc. For more background, read here and here.
- Products subject to 100% tariff: sparkling wine, food products, and more, all from France. Full list here (scroll way down to the ANNEX).
- What’s happening now: A hearing about the proposed tariffs took place on January 7th and 8th before the International Trade Commission. Rebuttal comments must be submitted by January 14th and tariffs could take effect very soon after that.
- The Large Civil Aircraft Dispute
- Companies affected by the subsidies in dispute: Airbus and Boeing. For more background, read here.
- There are two rounds of tariffs related to this dispute:
- Round 1 took effect in October 2019: 25% tariffs on certain wines from France, Spain, Germany and the UK + foods and other goods from EU countries (ANNEX I). For comparison, airlines faced tariffs of 10%.
- http://bending-elbows.com/oppose-wine-tariffs-consumer-letters/Round 2 is proposed: Raising the tariffs on items covered in Round 1 to 100%. And imposing 100% tariffs on additional wines and spirits from all EU countries + a host of other products (ANNEX II).
- Full list of products for Round 1 & 2 are here (scroll way down to the Annex). It’s way more than just wine.
- What’s happening now: Comments on the proposed tariffs are being accepted until January 13th
WHO GETS TO MAKE THE FINAL DECISION?
Ultimately, it’s the President and the United States Trade Representative (USTR) that will make the final decision.
The point of this comments process is to make sure they hear and understand that dispite the symbolic value of European wine and foodstuffs, because of the legally mandated quirks of our distribution systems, it is the small family-owned businesses and the jobs (and taxes) they provide that are at stake. And there are plenty of ways to amplify these issues.