Why haven’t we been able to kill the Trump zombie wine tariff, which is bad economics and bad public policy?
July 13 update: Federal trade officials announced Friday that the U.S. has delayed imposing additional tariffs on French wine until January, as part of the dispute over the French tax on Facebook, Google, and Amazon. And there is still no word on whether the Trump Administration will impose additional tariffs on all European wine as part of the Boeing-Airbus trade dispute. So, yes, some good news — though not as good as so many have been reporting.
July 6 post: Just when it seemed safe to drink European wine without worrying that it could double in price, the Trump zombie wine tariff is lurking over the horizon.
That’s the 100 percent tariff on almost all European wine, which the Trump Administration proposed in February. The administration backed off then, raising tariffs on European airplane parts instead. Which made perfectly good sense, since the original trade dispute was about airplane parts.
But the proposal is back. Last week, the Office of the U.S. Trade Representative proposed tariffs on nearly $3.1 billion worth of European products and that would raise the current wine tariff from 25 percent to 100 percent.
In other words, effectively doubling the price of European wine in the U.S. Some have gone as far as to call the 100 percent tariff the worst threat to the U.S. wine business – imported and domestic – since Prohibition.
None of this makes any sense, and not just because this whole thing is about airplane parts.
• The world economy is in recession. So why would any sane person consider raising taxes?
• The coronavirus. So why would any sane person consider raising taxes?
• France’s so-called digital tax on U.S. companies like Facebook, Amazon, and Google has somehow become part of the dispute, though why the federal government needs to protect these giga-billion dollar behemoths is beyond me. And doesn’t President Trump hate Amazon?
The good news, if there is any, is that most of the people I talked to say the tariff proposal is likely empty bluster, more posturing from an administration that has perfected bluster. Two wine industry officials, who asked not to be identified because of the sensitive nature of the topic, said they didn’t expect the 100 percent levy to be approved. One, who has been closely involved with negotiations, said, “My personal view is that the most likely outcome is no change” until the final World Trade Organization ruling later this year on the original aircraft parts dispute.
Having said that, this is no time for slacking off. After all, we all know how difficult it is to kill zombies. Hence, if you oppose the 100 percent tariff, you can leave a comment with the U.S. Trade Representative at this link. The comment period ends on July 26.
Image courtesy of George Romero’s Night of the Living Dead, using a Creative Commons license
More on the zombie wine tariff:
• Trump Administration backs off 100 percent wine tariff
• Welcome to Sherwood: Robin Hood takes on the wine tariffs
• Panic wine buying