Dear Friends and Colleagues,
Yesterday, the USTR announced additional tariffs related to the Large Civil Aircraft / Airbus matter. The changes are in response to Europe’s November enactment of $4 Billion in tariffs on U.S. products as part of a related case against Boeing. Specifically, the USTR takes issue with the way the EU calculated trade volumes on which their WTO-approved tariffs were based. While we had previously anticipated possible retaliation, the decision is nonetheless extremely disappointing. It highlights the real need for change, as the current USTR strategy has failed to bring the EU into compliance, while doing significant harm to small businesses here at home.
Included in these changes are newly added wine categories from France and Germany. Previously, 25% tariffs were added to: still wines, not over 14% alcohol, and not over 2 liters in size, from France, Germany, Spain, and the UK. The USTR has expanded that list to also include still wines from France and Germany that are over 14% alcohol, as well as those that are larger than 2 liters in size. There is also a rarely used customs code for “effervescent wine” (not sparkling) that is included. Wines from Spain or the UK that are over 14% alcohol, or over 2 liters in size, remain tariff free. Sparkling wine and Champagne remain tariff free.
In a nutshell, still wines from France and Germany now have 25% tariffs. Tariffs on wines from Spain and the UK remain the same. There are certain other lesser used products as well, you can find the details and HTS codes below. These changes go into effect on January 12, 2021. If you have products that will be impacted, that are already in transit, but will arrive on or after this date, please let me know.
This action further points to the need for the Biden administration to act quickly once in office. As we have pointed out, the challenge is their nominee for U.S. Trade Representative – Katherine Tai – will likely not be approved in time to oversee the next carousel date in mid February. This would make the most likely scenario a “punt” until the following carousel date in August. We are working hard to tell the Biden transition team why they should not wait. We need to convince President-elect Biden that tariff relief should be a major priority of his first few weeks in office, and this is no small task.
We are coordinating with a coalition of chefs and restaurateurs to help tell this story. With your help, we recently sent President-elect Biden a letter signed by over 2,000 restaurants from all fifty states, headlined by major figures in the restaurant world, asking for the removal of these tariffs. Further, The Washington Post has published an op-ed by Alice Waters and Kwame Onwuachi, urging President-elect Biden to remove these tariffs as part of an effort to bring quick relief to the restaurant industry. While it is not a silver bullet for restaurants, President-elect Biden can bring relief to huge numbers by repealing these tariffs, with no need to rely on Congress. Lastly, we expect the February carousel to have a comment period open soon, and we will need to work hard to ensure the Biden team comes into USTR with a large outcry against these tariffs.
This is not the news we wanted to hear. But it underscores the necessity of the Biden administration to make changes to the tariff policies brought on by his predecessor, particularly those that do such disproportionate damage to U.S. businesses in this time of crisis. We are hopeful that with your help, our message will be heard by fresh ears, and that relief will soon be on the horizon.
I know these are complicated matters, and if you have any questions, please do let me know. Thank you again for all of your help and support. We are, without doubt, stronger together. I look VERY forward to putting 2020 behind us, and seeing you in 2021!
My very best wishes to you and yours,
P.S. Please find the list of additional products subject to tariffs below.