New 25 percent EU spirits tariff threatens to ratchet trade war up another notch
The good news about repealing the 25 percent Trump European wine tariff? The administration that levied it will be gone in a couple of months. The bad news? A couple of commentators don’t see the Biden Administration as being necessarily more friendly toward trade and the European Union.
Alan Beattie, writing in The Financial Times, says the new administration won’t be as loopy on trade as Trump’s was, but that the days of free-traders Bill Clinton and Barack Obama won’t soon return. A Biden Administration won’t rush into anything, and while saying it believes in free trade, may not do what we want or hope it will do.
The other bad news? This week’s 25 percent European Union duty on U.S. rum, brandy, vodka and vermouth – one more tax as part of the Airbus-Boeing aircraft parts dispute, whose sad, pathetic history has turned into something only Dickens would recognize. This is in addition to a 25 percent tariff on U.S. bourbon and other whiskeys that took effect in June 2018, while Trump retaliated with the wine and Scotch tariff last fall.
In other words, all of us who were cautiously optimistic about being cautiously optimistic were probably too optimistic. Whatever signs there were that the EU was willing to compromise with the Biden Administration disappeared with the most recent tariff. Spirits producers on both sides of the Atlantic were already reeling – one trade group puts the sales losses at more than 30 percent for Scotch labels in the EU and more than 40 percent for U.S. brown goods companies. Hence, it’s difficult to see one more tariff as a sign of good faith.
Having said that, the Financial Times’ coverage of the U.S.-EU tariff war has been universally gloomy, so that’s one thing. More importantly, we’re all adults here, and rational people on both sides must realize that throwing tariffs at each other to settle a dispute that has already been mostly settled (both aircraft companies have renounced the illegal subsidies) seems pointless – as well as economically dangerous. And isn’t the economy in enough trouble as it is?