WTO Boeing Case: Impact on Wine & Spirits Business

The WTO report released on Tuesday confirmed that the EU will be able to impose retaliatory tariffs as the long standing case against Boeing comes to a close. Similar to the situation with the Airbus case, the EU will be awarded an amount up to $4 billion in trade from the United States. This amount needs to be reviewed by the Dispute Settlement Body and the final amount will be announced on October 26. The EU Commission is meeting with Member States and working on the final list of products that will be slated for retaliatory tariffs, and as previously reported, US beverage alcohol items are expected to be targets. Here is the original list of products published in April.

The US will respond, but we do not have a firm indication of whether more tariffs will be placed on EU products or if there will be a more restrained approach, and potentially a return to the negotiating table. If the EU decides to avoid placing tariffs on US products, this does not mean that the Airbus tariffs will be dropped, but  this action would certainly ease tensions. 

One of the key trade associations in our business, NABI, has issued a press release urging a “truce” and suspension of tariffs from both sides to allow the parties to move towards compliance with WTO obligations. This can be allowed under U.S. trade law, and was the methodology utilized when the USTR moved the date on the proposed retaliatory tariffs during the French DST/Digital Services Tax dispute. 

We will be providing more information as the situation develops and also in our upcoming webinar covering trade issues including a focus on BREXIT and the WTO Boeing and Airbus cases. Stay tuned for more information on this November post-election event!