EU Tariffs: Potential Increases & Additions

We are once again at the review date on the tariffs imposed after the WTO Airbus decision last year.  As a quick recap, the World Trade Organization (WTO) finalized the long standing case in favor of the USA, allowing the imposition of retaliatory tariffs on EU products. The first round of tariffs went into effect in October of 2019. After the first implementation date, the case is reviewed in 90 days and thereafter, every 180 days. The 90 day review resulted in no changes in the rate or products targeted in the beverage alcohol sector. We have just entered the comment period for the next review and the threat of expansion of the list or increased tariffs is very real. 

On June 23^rd USTR (United Stated Trade Representative) released the attached Federal Register Notice for the review of action on the Airbus tariff dispute. The comment period will open on June 26, 2020, and all comments must be submitted by July 26, 2020. The USTR has changed the process for submission of comments, and now requires the use of the electronic portal, which can be accessed at https://comments.ustr.gov/s/. Instructions on how to complete the comment form can be found in section D. "Procedures for Submission of Comments" on the Federal Register Notice.

The actions up for consideration are to potentially increase the current tariff of 25% to up to 100%, reconsider additional products to be tariffed that were considered last year but were not tariffed, and add new products not previously considered for increased duties. Below is a summary of additional alcoholic beverages from the noted countries that could potentially be hit with the tariff.

Annex I: the list of products currently subject to additional duties of 25% ad valorem

• Liqueurs and Cordials from Germany, Ireland, Italy, Spain, or the UK
• Single Malt Scotch and Single Malt Irish Whiskey from the UK

Certain wines from France, Germany, Spain or the United Kingdom:

• 2204.21.50: Wine other than Tokay (not carbonated), not over 14 percent alcohol, in containers not over 2 liters

Annex II: the list of products, originally published in the April and July 2019 notices, but which are NOT current subject to additional duties:

This includes brandy and whiskey from Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, or the United Kingdom.

• • 2208.20.20: Grape brandy, excluding pisco and singani, in containers not over 4 liters, not over $2.38/liter
  • 2208.20.30: Grape brandy, excluding pisco and singani, in containers not over 4 liters, valued over $2.38 to $3.43/liter
  • 2208.20.40: Grape brandy, excluding pisco and singani, in containers not over 4 liters, valued over $3.43/liter
  • 2208.20.50: Grape brandy, excluding pisco and singani, in containers over 4 liters, not over $2.38/liter
  • 2208.20.60: Grape brandy, excluding pisco and singani, in containers over 4 liters, over $2.38/liter
  • 2208.30.60: Whiskies, other than Irish and Scotch whiskies

Irish and Scotch Whiskies from Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, or Sweden.

• • 2208.30.30: Irish and Scotch whiskies

Liqueurs and Cordials Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Hungary, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, or Sweden.

• • 2208.70.00: Liqueurs and Cordials

Certain wines from Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, or the United Kingdom

• • 2204.10.00: Sparkling wine, made from grapes
  • 2204.21.20: Effervescent grape wine, in containers holding 2 liters or less
  • 2204.21.30: Tokay wine (not carbonated) not over 14% alcohol, in containers not over 2 liters
  • 2204.21.60: "Marsala" wine, over 14% vol. alcohol, in containers holding 2 liters or less
  • 2204.21.80: Grape wine, other than "Marsala", not sparkling or effervescent, over 14% vol. alcohol, in containers holding 2 liters or less
  • 2204.22.20: Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding more than 2 liters but not more than 4 liters
  • 2204.22.40: Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14%, in containers holding more than 2 liters but not more than 4 liters
  • 2204.22.60: Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding over 4 liters but not over 10 liters
  • 2204.22.80: Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14% in containers holding over 4 liters but not over 10 liters
  • 2204.29.61: Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume <=14% in containers holding >10 liters
  • 2204.29.81: Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14% in containers holding >10 liters
  • 2204.30.00: Grape must, nesoi, in fermentation or with fermentation arrested otherwise than by addition of alcohol

Annex III: a new list of products from France, Germany, Spain and the United Kingdom being considered for imposition of additional duties. This includes:

• • 2208.50.00: Gin and Geneve
  • 2208.60.10: Vodka, in containers each holding not over 4 liters, valued not over $2.05/liter
  • 2208.60.20: Vodka, in containers each holding not over 4 liters, valued over $2.05/liter
  • 2208.60.50: Vodka, in containers each holding over 4 liters
  • 2203.00.00: Beer made from malt

As you can see, these are some huge additions that would highly impact many of our members.  We will be working with the major industry associations to provide coalition based comments but we encourage everyone to submit comments to help stop these additions and potential increase on current tariffs. WSSA is here to help answer any questions you might have on the submission process and tariffs; please reach out to us at info@wssa.com with questions.