US punitive tariffs suspended for five years

Joint compromise between EU and US government.

The trade dispute between the EU and the USA has eased for now / Credit: pavlofox
The trade dispute between the EU and the USA has eased for now / Credit: pavlofox

After the USA introduced punitive tariffs on wine from several European countries under Donald Trump's administration, these have now been suspended for five years following a compromise. This was decided by the EU Commission and US President Joe Biden in Brussels on 15 June. Commission President von der Leyen thus declared "the longest trade dispute in the history of the WTO" to be over.

The dispute was triggered by the two parties' disagreement, which had been simmering for 17 years, over subsidies for the civil aircraft manufacturers Airbus and Boeing, after which former US President Trump imposed punitive tariffs on European products, including wine, at the end of 2019. The 25 percent tax rate caused losses of €1.6 billion a year, according to the industry association AREV (Assembly of Wine Regions of Europe). 

Reactions

Relief can be felt across the industry. Gerhard Brauer, chairman of the Association of German Wine Exporters (VDW), for example, is pleased with the decision: "This is very good news for our industry! Our winegrowers can breathe a sigh of relief and plan better again thanks to this long-term suspension of the punitive tariffs. The USA is by far the largest export market not only for EU wines but also for our wines from German growing regions, and the tariffs had a devastating impact on us."

EU-wide exports to the USA had fallen by 54 percent, and exports of German white wines had dropped by 20 percent. The tariffs were a massive obstacle for many winemakers in Europe, along with Brexit, the Corona pandemic and regional frost events.

The sanctions have not yet been permanently abolished. Within the five years of suspension, Brauer hopes to find "a compromise that will finally end the dispute and the imposition of these punitive tariffs". 

Felix Solis Yáñez from the Spanish wine company Felix Solis is also happy that wine producers no longer have to suffer from a trade dispute of the aviation industry: "Lifting of the US tariffs over EU wine is really welcome after more than one year. There are many families living on the wine business that do not deserve to pay for an airplane war. Coming back to common sense always helps!"

Similar reactions came from the French company Baron Philippe de Rothschild. Deputy Managing Director Véronique Hombroekx reports that there are now new market opportunities for their products: "We had chosen not to add this tax onto our wine prices since it did not make sense for our distributors and consumers to be impacted. But we are delighted to hear this news, since it will allow us to resume our in-the-field actions in what is a key historic market for Baron Philippe de Rothschild." 

Besides wine, other agricultural goods were also affected by the tariffs. With the decision, policymakers want to underline their common stance against China's non-market practices in the field of aviation, stressed US Trade Representative Katherine Tai at the meeting in Brussels. sw/aw
 

 

 

Latest Articles