Lawmakers urge administration to remove tariffs on European wine and spirits amid coronavirus pandemic

More than 160 lawmakers from both parties called on the United States trade representative (USTR) to remove the 25 percent tariffs on wine, cordials and whiskey products from the European Union in an effort to support the struggling hospitality industry during the coronavirus pandemic.

The group, led by Reps. Bill Pascrell (D-N.J.) and Brad Wenstrup (R-Ohio), wrote to USTR Robert Lighthizer on Wednesday following USTR’s proposal last month to expand the tariffs to include other wine and spirits. The Trump administration imposed the tariffs on European products in October in retaliation for European Union subsidies to aircraft manufacturer Airbus.

“We particularly are concerned that the economic situation in our country has changed dramatically since additional duties in relation to this case were imposed in October 2019. Tens of millions of Americans are now out of work and businesses across America have been devastated,” the lawmakers wrote. 

“We believe it is possible for our strategy to maintain maximum pressure on the EU to remove its subsidies case while avoiding harm to American workers, consumers, and small businesses to the greatest extent possible,” the added. 

The group noted that the pandemic has hit the food, beverage and hospitality industries as restaurants remain closed or are operating under limited seating. The tariffs cut into the tight profit margins retailers, restaurants, distributors and manufacturers are already facing.

“[W]e encourage you to continue seeking a suitable outcome with the EU that will eliminate these subsidies and resolve this longstanding trade dispute,” the lawmakers wrote. “[A]s you consider modifications to the related retaliation list in order to maintain pressure on the EU, we urge you to make changes that include taking a targeted approach and removing duties on food and drink products as that industry is struggling during the current pandemic.” 

Wine & Spirits Wholesalers of America (WSWA), which represents the wine industry, applauded the lawmakers’ letter. If current tariff levels persist, the U.S. alcohol industry is poised to lose more than 92,000 jobs and nearly $3.8 billion in wages, which would cost the U.S. economy $11 billion in 2020, a recent WSWA study found.

The Distilled Spirits Council of the United States (DISCUS) announced in February that American whiskey exports to the European Union decreased by 27 percent in 2019 due to retaliatory tariffs. The EU is the U.S. spirit industry’s largest export market. Globally, exports of American whiskey decreased by 16 percent in 2019.