The Wall Street Journal reports that "the U.S. Trade Representative’s office, which imposed 25% tariffs on wine, cheeses, olives and other products from the European Union in October, is now considering raising levies to 100%, citing a lack of progress in negotiating a settlement."
A tariff increase could come as soon as August 12.
The story notes that "importers, restaurateurs and others who buy European wines say higher tariffs would devastate an industry floored by months of lockdowns."
Some context about the broader dispute from the Journal:
"After a long-running dispute, the World Trade Organization ruled last year that the EU had given improper subsidies to the aircraft manufacturer Airbus, a rival to Boeing Co. The WTO ruling allowed the U.S. to impose as much as $7.5 billion in tariffs, but didn’t restrict the products on which the U.S. can impose the tariffs.
"As is typical when countries impose tariffs, the USTR hit Europeans on culturally significant exports—slapping the 25% tariffs on the food products and just 10% on aircraft. The U.S. later raised the airplane tariff to 15%, despite opposition by U.S. airlines."
- KC's View:
Get that French rosé now, folks.
To be honest, I am struggling to understand why this is good public policy at the moment, considering that so many retailers and importers have been hit hard by the pandemic. Not to mention the wisdom of making something that has become so essential during shelter-at-home policies more expensive when a recession is kicking in.