Allegrini 2018

USA, Trump has launched new threats of duties on wine from France (and Europe)

On CNBC, the US president promised to “do something: France makes us pay a lot, while we apply very low duties to French wines”
USA, Trump has launched new threats of duties on wine from France (and Europe)

USA, Trump has launched new threats to apply duties on wine from France (and Europe)
Trump is once again threatening to apply duties on wine, starting with France. In an interview on CNBC, the US president promised he would “do something” about French wine, because according to the White House, “France makes us pay a lot, while we apply very low duties to French wines”. The announcement came as quite a surprise particularly after Trump’s recent visit to Normandy, where he met the French President Macron, and spoke of “fantastic relationships” between the two countries. The announcement was surely made to cause a sensation, and therefore it raises the guard level for all European wine producers, because, as Bloomberg reminds us, this kind of measure would affect all wines made in the EU, since France is part of the European Union.
The US wine producers themselves would have asked for an increase in duties, Trump explained (whose family, at Trump Winery, produces wine in Virginia, ed.). According to the California Wine Institute, which represents the wine producers of the State, and which is by far the leading wine producer in the USA, the United States applies a rate of 5 cents per bottle for still wines, and 14 cents for sparkling wines, while the European Union duties applied would vary from 11 to 29 cents.
“High customs tariffs are the biggest barrier to US wine exports”, explained the Wine Institute. In 2018, exports of Californian wines decreased by 4.8% in value compared to 2017 (to 1.46 billion US dollars) and 1.2% in volume (to 375 million liters). This announcement should not be taken lightly by the EU, which exports a third of its production to the USA, or by France, since the United States is one of its main markets, nor by Italy especially, because the US is its number one foreign wine partner and additionally, almost a quarter of Italy’s wine production is exported to the United States. Furthermore, in the last few months, Trump's threat to introduce duties on European wine & food for over 20 billion US dollars was linked to the clash between the European Airbus and the American Boing, while instead this time Trump called wine directly into question and to support him, the American wine producers, which however, are already predominant on the domestic market. In the first 3 months of 2019, imports have already registered a significant decrease in value, -3.4% (to 1.42 billion US dollars), countered by a slight increase in volume, + 1.6% (3.07 million hectoliters), while the average price of imported wine has dropped considerably, from 5.4 US dollars per liter in 2008, to the current 4.7. These numbers come from data of the US Department of Commerce relative to the first quarter of 2019, analyzed by ICE in New York. Italy is following the same trend, though it is doing better than the market average, containing a loss in value at -1.6%, to 463 million US dollars, and registering a substantial growth in volume, +8.1%, reaching 0.86 million hectoliters, and an average price per liter of 5.4 US dollars.

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