New 25% Tariff Going into Effect at Midnight Tonight

As reported previously, the United States Trade Representative (USTR) announced additional items to be added to the list of targeted products subject to a 25% duty on top the normal duty on these products. Any of these items imported after 12:01am tonight (January 12) will be subject to the new tariff. If you have any products subject to these tariffs arriving, please be prepared to pay the duty or plan for an alternative process, such as entry into a bonded warehouse. Should you have any of these items currently stored in a bonded warehouse, you may want to consider withdrawal today should you need these products in the near future and avoid paying the higher duty. The items added are listed below for your quick reference.

We have had many questions in regards to the cognac valuation (HTS 2208.20.40) of $38.00 per proof liter. Similar to the situation with single malt and blended whiskies, the USTR has specified that only certain items falling into this classification are targeted. In this case, it is high value grape brandy, and lower valued product will not be hit. We have also had questions about the inclusion of Marsala and Tokay wine items as they are not products that originate in France or Germany. This still has yet to be fully clarified by the USTR, but the assumption is that they wanted all wine types included should they decide to add more countries to the target list at a later date. Please feel free to reach out to us should you have any questions or need further clarification.

Below is the revised list at the 25 percent additional duty.

1. 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*

The new administration may consider a suspension of the EU tariffs while they review and re-negotiate with the EU, and we will of course keep you advised should anything change.