U.S. Sets 30% Tariffs On E.U., Mexico For August 1, As Negotiations Continue
President Trump over the weekend announced a plan to impose 30% tariffs on the European Union and Mexico effective August 1, barring new trade deals with those U.S. trading partners. The statement followed a similar threat against Canada, promising 35% levies, on Thursday. Meanwhile, the E.U. postponed tariffs on U.S. goods that were slated to take effect tomorrow until August 1 to allow more time for negotiations.
Ben Aneff, president of the U.S. Wine Trade Alliance, said in a statement that the anti-tariff group sees Trump’s latest threat against the E.U. as intended ramp up further pressure on the bloc toward a trade deal. “We believe this letter, like many similar letters to other countries, is designed to put maximum pressure on the E.U. to come to a better deal with the United States,” he said. “We are urging the administration to come back to the table swiftly to strike a common-sense deal that carves out wine from tariffs that harm U.S. jobs, and protects this vital flow of goods.”
Still, European wine trade group Comité Européen des Entreprises Vins (CEEV) said it “has learned with concern that wine and aromatized wines may be left out of the E.U. trade offer currently being negotiated in the context of a broader agreement with the U.S. administration.” “We are deeply concerned about the potential exclusion of wine from the list of sensitive goods included in the deal package,” said CEEV president Marzia Varvaglione. The U.S. is the largest export destination for E.U. wines, accounting for 27% of E.U. wine exports in value and 21% in volume.
Lamberto Frescobaldi, head of Marchesi Frescobaldi and president of Italy’s Unione Italiana Vini (UIV) trade group, said a 30% tariff on Italian wine exports to the U.S. would amount to an embargo on many products. “A 30% tariff on wine, if confirmed, would amount to a near-embargo on 80% of Italian wine exports,” he asserted. “At this point, the fate of our industry—and hundreds of thousands of jobs—hangs on what could be considered extra time, which will prove crucial. It’s unrealistic to think such volumes can be redirected elsewhere in the short term. At the same time, an extraordinary intervention from the E.U. will be absolutely necessary.”
“Imported wine from the E.U. fuels an enormous American economic engine,” Aneff noted. “E.U. wine generates approximately $23.96 billion in U.S. revenue annually, while only $5.3 billion returns to Europe. That leaves a nearly $19 billion economic surplus here in the United States, sustaining hundreds of thousands of American jobs across all 50 states, with importers, distributors, retailers, and restaurants.”
Regarding the threats against Mexico and Canada, beverage alcohol imports from the two U.S. neighbors have been spared tariffs so far because they fall under the USMCA trade agreement. But at least for now, the administration says it intends to extend the levies to all goods as of August 1, absent a new deal. If enacted, those high tariffs would hamper the Tequila and Canadian whisky categories in the U.S. market.—Daniel Marsteller
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