US-EU tariffs: Trump has postponed 50% tariffs until July 9th, but the wine industry is worried

First of all, recently at the negotiations table, everyone was shocked by the threat of introducing 50% tariffs on EU goods, starting on June 1st, (to date, tariffs would have been effective starting in April at 20%, but they were immediately reduced to 10%, at least until July 9th). Next, during the phone call over the weekend, Ursula von der Leyen, President of the Commission asked and obtained from the US President postponing the tariffs until July 9th. This is the scenario set up by Donald Trump, made of abrupt accelerations that destabilize economies, followed by more or less partial backtracking. In the meantime, the issue is still on the table, and the wine world is feeling the effects, on one side of the Atlantic as well as the other. “The statements President Donald Trump has made regarding the possibility of introducing 50% tariffs on all European imports, raise serious questions about the future of transatlantic trade. Federvini believes it is essential to address the issue serenely, with foresight and responsibility, in light of the role that international trade plays in the competitiveness of the Italian production system”, Micaela Pallini, at the helm of the Federation, commented in a note. She added, “it is essential to continue intensifying every effort towards dialogue and cooperation, which the European and US institutions have already undertaken, thereby avoiding drifts that could put the solidity of production chains, which have built relationships based on quality, transparency and mutual respect over time, at risk. Now, since instability is the global context, we need a collective effort to preserve the international trade balance and safeguard the work of thousands of companies and territories that contribute highly to the reputation and strength of Made in Italy”.
“President Trump’s new threat creates a further burden of uncertainty for Italian companies, starting with the wine sector. The sector, which sends 24% (1.94 billion euros) of all its wine exports to the United States, for the past several months has been unable to plan its future, which is a huge loss, regardless of the size of the tariff”, Lamberto Frescobaldi, president of Unione Italiana Vini (UIV), commented, and then added,“ here is an example. Recently, Italian wine companies have been planning European calls for tenders of the OCM Promotion, including tens of millions of euros in investments destined for the USA, their main target. Clearly, the threat of a 50% tariff - which would be considered an embargo rather than a tariff - gives the immediate effect of necessarily abandoning the investment. And, consequently, giving up development plans in a sector that relies on exports more and more. We are, therefore, asking Brussels and Rome to intensify negotiations, because the fundamental discriminant factor is time”.
The American wine industry has also been concerned, since the beginning of the tariff dispute, and is not favorable to tariffs on European Union wines, as the US Wine Trade Alliance (USWTA), has repeated, and according to whom “a 50% tariff would essentially amount to a trade embargo on goods from the European Union, which would cause irreparable harm to hundreds of thousands of companies here in the United States.
On Friday, May 23rd (the day of Trump’s post), the European Trade Commissioner, Maroš Šefčovič, spoke to Jamieson Greer, the US Trade Representative (USTR) to discuss the latest EU proposal. We hope that common sense will prevail, and that the current pause in additional tariffs will be maintained until July 8th, which is a credible risk. We will be hosting an event with the Congressional Wine Caucus on June 5th, where we will highlight the importance of these products. We expect more lobbying from members of Congress towards the administration, as it becomes clear how catastrophic a tariff of this nature would be for US companies that have already suffered. The United States imports approximately 15 million US dollars worth of wine every day from the European Union, meaning that US companies earn 67million US dollars a day. These products are essential to the health of businesses in every American city. A trade embargo of this nature would be a terrible self-inflicted wound, causing enormous harm to the US, and little or no benefit. We urge both the EU and the US to come together and resolve their differences, and create the certainty that companies need to grow and contribute to a healthy economy”.