EU import duties on wine are higher than those imposed by US
- This article is more than one year old.
- Published on November 14, 2018 at 15:00
- 2 min read
- By Douglas GILLISON
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- WHAT ARE WE VERIFYING? -
After participating in the weekend's centennial World War I commemorations in France, where bitter divisions among the transatlantic partners were on full display, Trump fired off a tweet accusing Paris of taking advantage of the United States in the wine trade.
On Trade, France makes excellent wine, but so does the U.S. The problem is that France makes it very hard for the U.S. to sell its wines into France, and charges big Tariffs, whereas the U.S. makes it easy for French wines, and charges very small Tariffs. Not fair, must change!
— Donald J. Trump (@realDonaldTrump) November 13, 2018
The presidential tweet was consistent with Trump's long-held view of international commerce: he often states that a trade deficit -- i.e. when one country imports more than it exports -- means that country is getting "ripped off" or "killed."
Economists dispute the idea that trade deficits are entirely negative, as they allow industries and consumers access to lower-cost goods, especially when domestic production is not enough to meet demand.
- WHAT DO WE KNOW? -
As a member of the European Union, France does not set the economic bloc's uniform system for handling imports and exports. All 28 national customs services act in unison, applying common tariffs to all goods entering their borders which then move unhindered throughout the EU.
US border taxes on imported wine are lower than those imposed by the EU.
Depending on the nature of the wine and its alcohol content, at the US border imported wine is dutiable at a rate of 5.3 cents to 12.7 cents per 750 ml bottle, according to the US International Trade Commission.
Sparkling wine is taxed a higher rate of about 14.9 cents a bottle.
On the other hand, according to the Wine Institute, a trade body promoting American exports, US wine entering Europe faces duties ranging from 11 to 29 cents per bottle depending on alcohol content.
Furthermore, Americans drink far more European wine than the other way around. The Wine Institute said that in 2017, the United States imported $4.5 billion in European wine but sold only $553 million intended for European drinkers.
For sparkling wines, the trade gap is even more severe: $1.2 billion in Champagne, Prosecco, Cava and other fizzy tipples went to America but only $3.5 million in American spumante was offloaded in the EU.
"Wine Institute believes the upcoming trade negotiations between the US and EU will create market opportunities by reducing tariffs and addressing other market access issues," Robert Koch, the institute's president and CEO, said in a statement.
- WHAT CAN BE CONCLUDED? -
France, a historic center of wine production, buys less of the American product, but higher import tariffs set by the EU are not the only reason French consumers opt for local wine. As of August, wine regions were reporting a bumper harvest for 2018.
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