AUSTIN, Texas — Anxiety continues to grow for wine makers and retailers on both sides of the Atlantic as American and European trade officials square off over plane subsidies.
- Europe began subsidizing plane production for Airbus
- Trade officials threatening to hike tariffs by 100 percent
- USTR taking public comment until January 13
The dispute began when Europe began subsidizing plane production for the company Airbus, which U.S. officials called unfair to American manufacturer Boeing. As a result, trade officials are threatening to hike tariffs on wine to the tune of 100 percent.
If they’re approved, New Year’s Eve champagne might cost much more this time next year.
As the political dispute over plane production in Europe continues to unfold on the world stage, wine retailers are bracing for an industry-wide disruption.
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“It is the number one category of wines that we offer,” says John Roengik of the Austin Wine Merchant.
If he wants to keep European wines on his shelves, he may have to spend more if trade officials green light the tariff increase.
“It would affect our bottom line enormously. I’m not exactly sure what percentage but easily over half of our business is involved in wines coming from Europe,” he said.
That means over half of business could be in jeopardy.
“It is painful. Of course it’s painful that my livelihood is at stake,” he said.
The gap in European wines could provide an opportunity for American winemakers, or wine producers from places unaffected by tariffs. However, retailers say the demand may not be the same.
“We can’t take our French and Italian and German wine sections and replace them with things from other places because the qualities of those wines from other places don’t replace French, German, Italian, Spanish, Portuguese wines,” said Roengik.
Fortunately for retailers, like the Austin Wine Merchant, there’s inventory to hold over the first part of what could be a turbulent process.
“It’s not just me or my customers. It’s going to be my employees, it’s going to be people who are in the support side of the business—you know, people who work for the wholesaler, drivers who drive the trucks for the wholesaler,” he said.
For now, it’s a waiting game and tensions don’t appear to be winding down.
European officials have said they stand ready to roll out tariff retaliations of their own, but both sides have said they’re willing to sit down and try to come up with a solution.
In the meantime, the U.S. Trade Representative’s Office is taking public comment on this tariff hike proposal on their website through January 13.
