Despite lobbying by wine interests for removal of U.S. tariffs on certain EU wine, the Biden administration announced on Feb. 12 that the tariffs would remain in place.
In 2019, the U.S. imposed 25 percent retaliatory tariffs on imports of French, German and Spanish wines with 14 percent ABV and lower, as part of a long-running trade dispute between the U.S. and EU over subsidies for aircraft manufacturers Boeing and Airbus.
The tariffs hurt the wine industries and consumers on both sides of the Atlantic.
In January, former U.S. Trade Representative Robert Lighthizer added 25 percent tariffs to French and German imports of wine with 14 percent ABV and higher. In addition, the swift implementation meant wine that was in transit to the U.S. from Europe suddenly became much more pricey for both the U.S. importer—and ultimately, the consumer.
There are some promising signs on the trade front, however.
Congress is expected to start hearings on Biden’s USTR nominee, Katherine Tai, at the end of this month. Tai has strong support from Democrats and Republicans and is a respected trade negotiator who also played a significant role in the USMCA (United States-Mexico-Canada) free trade agreement.
In general, the Biden administration is expected to take a much less confrontational approach to trade compared to the previous administration.
For example, its support of Ngozi Okonjo-Iweala as the next director-general of the WTO helped her secure the role this week and make history at the same time. She is the first African, and first woman, to lead the global trade body.
The Trump administration blocked Okonjo-Iweala’s candidacy in October by supporting rival candidate Yoo Mhung-hee, Trade Minister of South Korea.
Trade experts say the Biden administration is making a careful review of existing U.S. trade policy before making any changes.
We’re betting that the retaliatory wine tariffs will be at the top of the agenda once the U.S. and EU convene for the next round of trade negotiations.