A Tariff War: Who is Benefitting and Who is Not

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18/10/2019 Italian wine escapes the tarrif, EU faces 25% hike

Wednesday 16 October: US President Donald Trump imposed the tariffs on $7.5 billion worth of European goods as the World Trade Organization on Monday officially gave the thumbs up for the United States to impose the trade sanctions, in retaliation for the European plane creator Airbus getting illegal subsidies.

The tariffs the Trump administration is about to impose on wine, liquor and cheese from Europe couldn’t come at a worse time for small retailers.

“It’s kind of scary in the sense that we’re getting to the holiday season,” says Joseph Kakos, owner of Kakos Fine Wine & Spirits in Birmingham, Michigan. “October, November and December are the time when you really make your money for the year.” JapanTimes.Co

"It's a nightmare," says Aurélie Bertin, who runs the 700-year-old winery Chateau Sainte-Roseline in southern France. "We don't know what will be the result."

Her rosé wine business has boomed in recent years thanks to American demand for the beverage. She fears her U.S. sales could drop by a third under the new tariffs - USA Today

The tariffs will be slapped on goods that arrive in the U.S. from Friday onward. One bit of good news is that much of the food and beverages to be sold during the holiday season is now in the country and headed to store shelves, so retailers generally won’t have to suddenly come up with extra cash to pay for holiday merchandise.

The four stakeholders in Airbus – Spain, France, Germany and Britain - were targeted with more tariffs than other EU countries.

There is a business reason for this. The US has complained to the World Trade Organization since 2004, long before President Donald Trump took office, that Airbus is unfairly subsidized by EU countries. Airbus has airplane manufacturing facilities in France, Germany, Spain and the UK, but not in Italy.

Does this mean there is more opportunity for other countries wines to grow their distribution in the US market? And that consumers will be considering price sensitive wines since prices for French wines have gone up?