Section 301 Tariffs - Threat or Reality?

Are new tariffs coming for Alcoholic Beverages from Europe?

(and USA beverages going to Europe)?

Wine and liquor are on the list of products slated for additional duties under Section 301. For those of you not familiar with the current trade war issues and terminology, Section 301 of the US Trade Act of 1974 allows the President to take any and all action, including retaliation, to obtain the removal of policy or practice of a foreign government that either violates a trade agreement or is unjustified, unreasonable, discriminatory, and that burdens or restricts US commerce. The latest Section 301 action is a retaliation action based on EU subsidies to Airbus that have caused economic damage to US industry. The list includes 317 tariff subheadings, including alcoholic beverages. 

Europe has responded with their own list of proposed tariffs on American products, and this list also includes alcoholic beverages—sparkling wine, wine, rum, vodka, and other spirits.

Both sides are requesting and receiving public comments, and on the USA side, comments are due by May 6, 2019, with a public hearing to be held on May 15th. Should you want to provide comments, you can go to the Federal eRulemaking portal:  http://www.regulations.gov and the docket number is USTR-2019-0003.  

We expect that trade talks will continue and the tariffs may be more threat than reality, but there are a lot of moving parts and very difficult to predict the outcome.

For more detailed information, please feel free to contact us.

Additional information can be found in the attached article from Politico.