Trump imposed tariffs of 25 percent on European cheeses, wine, and other luxury goods last year after the World Trade Organization (WTO) gave him the green light to impose them in response to subsidies for French aerospace giant Airbus, but he may increase those tariffs this weekend.
The European Union (EU) tried to appeal the WTO's ruling in favor of Trump's tariffs, but their appeal was rejected and Trump said he would retaliate for their attempt to appeal the ruling.
Trump may do that this weekend by increasing his tariffs from 25 to 100 percent and industry experts say the price of some spirits will increase dramatically.
By this weekend, the U.S. Trade Representative (USTR) may institute a new round of tariffs on wines and spirits (as well as other luxury goods and foodstuffs, such as cheese) imported from the European Union. The increase could affix as much as a 100% increase to the import price. It’s the latest escalation in Trump’s trade war with the EU, which saw a 25% tax levied this past October and has united distillers on both sides of the Atlantic as it rattles the global whiskey business.
“Assuming there is a 100% ad valorem tariff, American consumers could expect the average price of impacted spirits and wines to be approximately 60% more costly in stores, restaurants, and bars within 90 days of tariff imposition,” says David M. Jabour, president of Twin Liquors, one of Texas’s largest beverage retailers, with 80 locations.
Other says certain European spirits simply won't be available anymore because they will be too expensive.
"It can be hard for customers to understand why these retaliatory tariffs are impacting their lives," said Amanda Smeltz, the wine director at Manhattan restaurants estela and Altro Paradiso, whose owner recently sent emails to customers asking them to submit written comments to USTR. It argued that the tariffs would make it hard for small businesses to survive.
"If you ever enjoyed a beautiful whiskey from Ireland or a fine bottle of wine on your birthday -- you can kiss those things goodbye," she added.
It's also possible Trump won't go through with this, of course, but I expect we'll wake up to higher tariffs on Monday morning.
I would be happy to be wrong about that as this will likely lead to the closure of stores and restaurants that can't afford to operate under these cost-prohibitive tariffs. Businesses can expect to pay a very high price just to move goods into the country before they ever hit shelves and bars where customers may not be willing to pay twice as much for the same thing they had before.
And what are we gaining from this?
Boeing is in the toilet right now and they only have themselves to blame for it. Boeing's recent collapse is the result of deregulation and corporate malfeasance; it has nothing to do with subsidies provided to Airbus in the 2000s when George W. Bush was still president.
Doubling the price of European wine isn't going to help anyone except maybe Trump's own family wine business.