US tariffs on EU wines ‘deplorable’, says French drinks body president

Drastic tariffs the US has threatened to place on French goods such as Champagne will cripple the nation’s wine businesses, according to one industry leader, who has called on Emmanuel Macron to take “all the necessary initiatives” to stop their enforcement.

The US government has proposed tariffs of up to 100% on French goods, including sparkling wine, cheese and handbags, valued at US$2.4 billion in retaliation to a French tax placed on American tech companies.

The digital services tax, dubbed GAFA (which stands for ‘Google, Apple, Facebook and Amazon’), would impose a 3% levy on the total annual revenues of the largest global tech companies providing services in France.

But the Trump administration has hit back with its own retaliatory tariffs.

Trump promised to announce “substantial reciprocal action” to what he called “[President] Macron’s foolishness”, in July However in the following month, an agreement was reached to suspend the dispute.

Then on 2 December, the U.S. Trade Representative ruled that the French tax discriminates against US-based companies and is “inconsistent with prevailing principles”.

They warned they could introduce tariffs “up to 100%” on some products.

“We deplore of course this announcement which, after the dispute over Airbus, targets French wines again and always in the context of a dispute between France and the United States that does not concern our sector” Antoine Leccia, President of FEVS, said.

French wine has already been the target of US tariffs after a 25% import duty was imposed on still wine (not over 14% ABV) back in October. The tariffs also affect products made in Germany, Spain and the UK, transported in containers of 2 litres or less. Liqueurs made in Germany, Ireland, Spain and the UK as well as Scotch whisky are also subject to an additional 25% tariff.

Over the past year (figures available at the end of September 2019), France exported 4.1 million cases of 9lr of sparkling wines, for a turnover of approximately €690 million. Sparkling wines account for nearly 40% in value and 20% in volume of total exports of French wines to the United States.

Leccia added that, for the past six weeks, French producers have been “harshly affected by the Airbus litigation.”

“A month remains for the French authorities to reach an agreement with the United States on digital services and prevent these rights from coming into effect. It will then be necessary for France and its European partners to strengthen their efforts on the Airbus issue.”

“We therefore solemnly call on the President of the Republic to take, from today, all the necessary initiatives, at the national, bilateral and international levels, so that our sector does not pay the price of the economic and political choices made by France.”