New Year Trade Recap

As we welcome 2021 and ease back into the post-holiday routine, we would like to recap the key industry updates that passed over the holiday break:

CBMA Gains Permanence

As we reported December 28th, the President signed the “Consolidated Appropriations Act 2021” as approved by Congress, which included permanency for the Craft Beverage Modernization Act. For the beverage alcohol industry, this is great news! As reported previously, there are changes in the language of the law that will have an impact, primarily on importers. But, for importers, nothing changes in the immediate term and all provisions currently in place are planned to continue until January 1, 2023. However, there are some documentation procedural changes that CBP announced, and we have subsequently reported. Should you need assistance with those changes, please let us know.

In the next six months, the legislation requires that the Department of Treasury, in coordination with CBP/Department of Homeland Security, prepare a report as to the implementation and new process for administering CBMA post December 31, 2022. WSSA and other key industry associations expect to be actively involved in providing input to the future process, and we look forward to working with all of our members for public input.

US Expands Retaliatory Tariff List

New Year’s Eve, we reported the announcement of the addition to the retaliatory tariff list under the WTO Airbus decision. Please note that there was an error in the previous publication as we stated,“the tariffs are specific to the size of the containers thus not affecting the normal 750ml bottles or 1.5 L bottles, but only on over 2L for the majority of the items” which is incorrect. As specified by the list below, many of the products will be subject to the tariffs in containers 2 liters or less, but please refer to the specifications under the tariff heading for specific container sizes.

The following products of France and Germany have been added to the action, and included in Part 18, which has been inserted in the descriptive list in Section 2.

HTS Subheading Product Description

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 over 2liters but not over 4liters

2204.22.40 Wine of fresh grapes, other than sparkling wine, of an alcoholic strength by volume >14% in containers holding over 2 liters but not over 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

2208.20.40** Spirits obtained by distilling grape wine or grape marc (grape brandy), other than Pisco and Singani, in containers each holding not over 4 liters, valued over $38 per proof liter**Only a portion of HS8 digit is to be covered

Note that it is only origin France and Germany targeted in this latest update. The 25% tariff on these new products is expected to go into effect for items imported after midnight on January 12, 2021. We realize that many of you may have shipments on the water already that will be subject to these tariffs and this is a huge impact. We will update further when the final notice is published.

BREXIT Deal

After a complex and intense negotiation, a deal was finally agreed upon December 24th, and as of December 31, 2020, the UK officially enacted the separation from the EU. The deal means new regulations for work, travel and trade, meaning new documents for cross-border transport and items coming into ports. While the UK and EU can continue trade with no extra taxes on goods, there are uncertain times ahead for how this deal will impact trade and service work between the two entities. The UK is also now looking to set its own trade policies and has been in discussions with the US, Australia and New Zealand to establish new trade deals. Due to new regulations and increased documentation requirements for trade, some disruption and delays could be an expectation at UK ports in the coming months. We will of course monitor this situation and provide updates regularly.

As always, if you have any questions, please let us know!