Recently, the U.S. Biden administration suspended a 25% tariff on European wines, including most French, Spanish and German wines. European vintners, who have been implicated in the airline subsidy dispute for years, can finally breathe a sigh of relief.
Image courtesy of: wine dendrobium.com
The European Union and the United States have reached a four-month interim agreement during which they will suspend all tariff increases due to the Boeing-Airbus subsidy dispute. The media expects that the two sides will start negotiations on the dispute within four months.
The Trump administration has escalated the battle between the U.S. and the European Union over Airbus and Boeing subsidies after 16 years of continuous trade litigation in which the two accused each other of providing tens of billions of dollars in illegal subsidies to aircraft manufacturers to help them win markets by unfairly competing.
As a result of that dispute, in October 2019, the Trump administration imposed taxes on nearly $7.5 billion in annual imports of European goods and services. In January, the White House retaliated again by extending the tariffs to French and German wines, including those with an alcohol content of more than 14 percent. In retaliation, in October 2020, the World Trade Organization authorized Europe to impose tariffs on $4 billion in U.S. goods.
Trade sanctions have led to a significant decline in European wine and spirits exports to the United States. According to the U.S. International Trade Commission (U.S. International Trade Commission), imports of French wine fell by more than 50 percent from January to June 2020 compared to the same period last year. Spanish wine imports are down 60 percent.
Citing French media reports, Farges, president of the Bordeaux Wine Association (CIVB), said on June 6 that the suspension of U.S. tariffs on European wines is good news for the wine industry. This will enable us to regain market share in the United States.