People are losing jobs and taking salary cuts to protect a company whose stock price has soared almost two-thirds in five years
We can quantify the tariff’s damage to the wine business with one sentence: U.S. companies are paying the tariff – how much sense does that make if the tariff is supposed to be punishing European companies?
I was reminded of this during a recent chat with Patrick Mata of Ole & Obrigado, one of the best Spanish wine importers in the world. You can hear the entire conversation as a podcast next week; what’s worth noting here is Mata’s analysis of the tariff: His company’s sales were down 20 percent in 2020 because of the tariff (and, of course, the pandemic). How is that punishing Europe for subsidizing airline manufacturing?
It’s not, and it’s one reason why we’re still talking about this foolishness almost 18 months after it started. Because, as one trade group executive noted, “The only link between aircraft and beverage alcohol is the fact you can purchase a drink on your flight.”
In this, take one look at any of the numbers, and you’ll be able to see the wreckage – not in phony, sound-bite geopolitical terms, but in human terms – and in the middle of the worst world health crisis in decades:
• One family-owned New York City importer has had to pay more than $2 million in tariffs, so it’s in a hiring freeze. Another had to cut salaries by 20 percent for family members.
• The Commerce Department reported that bottled table wine imports fell almost nine percent in 2020 by volume, and a whopping 21 percent in value. Those numbers, and especially the latter, are almost unprecedented.
• France has been especially hard hit. Bottled table wine shipments to the U.S. had recorded 10 consecutive years of volume growth prior to 2020, when they fell by volume and dollars – almost one-quarter of the latter.
So this is where I mention Boeing’s stock price, the company that the tariffs are protecting: It’s about two-thirds higher than it was five years ago. If that’s failing, the blog should fail so badly.