There was a spate of news stories over the weekend similar to this piece from Fox5San Diego, announcing that U.S. tariffs will make Scotch whisky and French wine more expensive for Americans.
Of course they will. But here’s the thing: The U.S. tariffs – a response to illegal subsidies to Airbus by European nations – will affect less than 2% of the value of total EU exports to the U.S.
If Americans find the tariffs make EU products too expensive, they can always buy American, helping offset the impact of other nation’s tariffs on our agricultural products.
But the tariffs are nothing but bad news for Scotland. “The US is our largest and most valuable single market, and over $1 billion of Scotch Whisky was exported there last year,” said Karen Betts, chief executive of the Scotch Whisky Association. Tariffs would “disproportionately impact smaller producers,” Betts said in a statement.
Jim Clerkin, CEO of Moët Hennessy North America, said that there is “no doubt in my mind” that Europe will retaliate against American winemakers. “I fear that it will be a challenging time,” Clerkin said. “I think it’s not good for the industry. … Who knows when the tariffs come back off again?”
The U.S. is the most lucrative export market for EU wines and vice versa, according to the European Committee of Wine Companies (CEEV). A third of EU wine exports to the United States -— which totaled €3.76 billion ($4.1 billion) in 2018 — come from countries targeted by wine tariffs, namely, France, Germany, Spain and the United Kingdom, the CEEV said in a statement.
What is a shame is that this tariff battle has nothing to do with wine or spirits. The World Trade Organization (WTO) ruled Wednesday that the United States could target goods from EU nations because the bloc had failed to comply with an earlier ruling regarding government subsidies for Airbus.
The award is the largest in WTO history and the latest twist in a 15-year saga in which both Europe and America were found to have provided unlawful subsidies to the world’s biggest airplane manufacturers.