US to impose 25% tariff on European wine, cheese, etc.

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Eric Ifune
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Re: US to impose 25% tariff on European wine, cheese, etc.

#201 Post by Eric Ifune » October 4th, 2019, 4:57 am

Since I currently only buy Portuguese wines, I have no problem. Perhaps you all should too. As good as anything in France for a third the price even without tariffs. :)

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Re: US to impose 25% tariff on European wine, cheese, etc.

#202 Post by Dan Kravitz » October 4th, 2019, 5:33 am

to Greg T and Robert.A.Jr.,

Please note that I said "Europe complains that inflated Defense Department contracts with Boeing amount to a hidden subsidy." I did not say anything about the merits of their complaints. In fact, I am monumentally unqualified to do so, which is why I don't state that Boeing's contracts ARE a hidden subsidy. As to the personnel who adjudicate such claims, I am also ignorant. Perhaps I should not have said that they were economists or statisticians as I know nothing about the qualifications of people in these jobs.

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Re: US to impose 25% tariff on European wine, cheese, etc.

#203 Post by CJ Beazley » October 4th, 2019, 6:02 am

Eric Ifune wrote:
October 4th, 2019, 4:57 am
Since I currently only buy Portuguese wines, I have no problem. Perhaps you all should too. As good as anything in France for a third the price even without tariffs. :)
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Re: US to impose 25% tariff on European wine, cheese, etc.

#204 Post by D@vid Bu3ker » October 4th, 2019, 6:08 am

As an export/import professional in the aerospace industry, I can speculate with some basis. There is a clear difference between the Airbus subsidies and the Boeing defense contracts. Airbus received money from European nations in exchange for essentially nothing. Boeing has contracts that ultimately require delivery of a product. Whether those contracts are “inflated” is nearly impossible to determine. It’s easy to look at the price tag, and say that it’s too high, but there is little in terms of objective criteria on which to base the claim.

It’s also worth noting that Airbus makes military platforms such as the A400M. Over 80 of those planes have been delivered so far, to customers such as the French military. Boeing has a larger defense sector, but that does not automatically create artificial advantage.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#205 Post by Charlie Carnes » October 4th, 2019, 6:31 am

Marcu$ Stanley wrote:
October 2nd, 2019, 5:57 pm
Damn, what a bizarre incentive structure. Big subsidy to overextracted left bank Bordeaux and Burgundy. Does anyone have Trump Administration connections that can change it to a 25% tariff on wines *over* 14%? Much better public policy justification!
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Re: US to impose 25% tariff on European wine, cheese, etc.

#206 Post by Jay Miller » October 4th, 2019, 8:32 am

Dan Kravitz wrote:
October 3rd, 2019, 5:36 pm
Stuff about tariffs:


The tariffs max out at $7.5 billion. They are not just on wine. Scotch, screwdrivers (the metal kind), suits from Savile Row and a whole lot more are included. Although the tariffs are only 10% on much of the machine tooling coming from Germany, everything else is 25%. In theory, once the U.S. collects $7.5 billion (on just over $30 billion worth of products), the tariffs go away.
Assuming there is no negotiated settlement before they kick in (consensus is that this is unlikely), I heard estimates of from 1 – 3 months before the dollar figure is reached.
...
On a more serious note, my business will be impacted fairly severely. How severely I will find out in the next few days.

Dan Kravitz
Thank you Dan for a very informative post. It sounds like my best option may be to postpone shipment on my pending case from London from the Autumn until the Spring. Though my total cost was <$1000 so I could just eat the $250 and spend some time cursing the current government.

Or is that per calendar year and the 7.5 billion will reset in January 2020?

And my best wishes for a minimal impact to your business.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#207 Post by Sh@n A » October 4th, 2019, 9:25 am

Is the $7.5BN verified? So the 25% tariff would never be outstanding for a full year?
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Re: US to impose 25% tariff on European wine, cheese, etc.

#208 Post by L e o F r o k i c » October 4th, 2019, 9:31 am

Dan Kravitz wrote:
October 3rd, 2019, 5:36 pm

To Leo Frokic – These wines are available in abundance in “America’s Heartland”. Without looking up numbers, last year I probably sold 30,000 cases in the Midwest, Southwest and Mountain states.

Dan Kravitz
I said most of those products. Go to Fairway in NY and look at their cheese selection and then go to any market in Americas Heartland and look what they have to offer, same with cured meats and so on....
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Re: US to impose 25% tariff on European wine, cheese, etc.

#209 Post by CraigT » October 4th, 2019, 10:08 am

Pat Martin wrote:
October 3rd, 2019, 12:03 pm
I just spoke to K&L about my pre-arrivals, and they intend to honor the price originally paid by the customer on all pre-arrivals, even those impacted by the tariff. Quality outfit.
Just got email from Zachy’s saying there changing the language and gonna hit me with the extra tariff. They also said there going to delay shipping from Europe hoping it goes away. I’m glad I didn’t buy much from Zachy’s. deadhorse
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Re: US to impose 25% tariff on European wine, cheese, etc.

#210 Post by Claus Jeppesen » October 4th, 2019, 10:24 am

Did Boeing get subsidies for developing 737 max????
Well that is self destruction on others behalf
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Re: US to impose 25% tariff on European wine, cheese, etc.

#211 Post by Marcu$ Stanley » October 4th, 2019, 10:31 am

CraigT wrote:
October 4th, 2019, 10:08 am
Pat Martin wrote:
October 3rd, 2019, 12:03 pm
I just spoke to K&L about my pre-arrivals, and they intend to honor the price originally paid by the customer on all pre-arrivals, even those impacted by the tariff. Quality outfit.
Just got email from Zachy’s saying there changing the language and gonna hit me with the extra tariff. They also said there going to delay shipping from Europe hoping it goes away. I’m glad I didn’t buy much from Zachy’s. deadhorse
based on Zachys prices you'd think they already had all kinds of tariffs priced in...

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Re: US to impose 25% tariff on European wine, cheese, etc.

#212 Post by John Morris » October 4th, 2019, 10:44 am

CraigT wrote:
October 4th, 2019, 10:08 am
Pat Martin wrote:
October 3rd, 2019, 12:03 pm
I just spoke to K&L about my pre-arrivals, and they intend to honor the price originally paid by the customer on all pre-arrivals, even those impacted by the tariff. Quality outfit.
Just got email from Zachy’s saying there changing the language and gonna hit me with the extra tariff. They also said there going to delay shipping from Europe hoping it goes away. I’m glad I didn’t buy much from Zachy’s. deadhorse
They're changing the language after the purchase? Or are they just citing the language they had?

Can you quote us the language on this? I'm really curious.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#213 Post by Robert.A.Jr. » October 4th, 2019, 11:43 am

Marcu$ Stanley wrote:
October 4th, 2019, 10:31 am
CraigT wrote:
October 4th, 2019, 10:08 am
Pat Martin wrote:
October 3rd, 2019, 12:03 pm
I just spoke to K&L about my pre-arrivals, and they intend to honor the price originally paid by the customer on all pre-arrivals, even those impacted by the tariff. Quality outfit.
Just got email from Zachy’s saying there changing the language and gonna hit me with the extra tariff. They also said there going to delay shipping from Europe hoping it goes away. I’m glad I didn’t buy much from Zachy’s. deadhorse
based on Zachys prices you'd think they already had all kinds of tariffs priced in...
Respectfully, I don’t get the logic of why the buyer gets a freebie on a tariff neither the seller nor buyer could have anticipated at time of contracting or had any control over it. The seller should give the buyer the option of paying the tariff or rescinding the transaction. Do these retailers even have that kind of profit market built into futures? I would think it would be a big loss.
Last edited by Robert.A.Jr. on October 4th, 2019, 1:01 pm, edited 1 time in total.

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Re: US to impose 25% tariff on European wine, cheese, etc.

#214 Post by Greg K » October 4th, 2019, 12:35 pm

Robert.A.Jr. wrote:
October 4th, 2019, 11:43 am
Marcu$ Stanley wrote:
October 4th, 2019, 10:31 am
CraigT wrote:
October 4th, 2019, 10:08 am


Just got email from Zachy’s saying there changing the language and gonna hit me with the extra tariff. They also said there going to delay shipping from Europe hoping it goes away. I’m glad I didn’t buy much from Zachy’s. deadhorse
based on Zachys prices you'd think they already had all kinds of tariffs priced in...
Respectfully, I don’t get the logic of why the buyer gets a freebie on a tariff neither the seller nor buyer could have anticipated at time of contracting or had any control over it. The seller should give the buyer the option of paying the tariff or rescinding the transaction. Do these consumers even have that kind of profit market built into futures? I would think it would be a big loss.
There's a reason a lot of the agreements I draft have provisions for "tax events" [smileyvault-ban.gif]
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Re: US to impose 25% tariff on European wine, cheese, etc.

#215 Post by D@vid Bu3ker » October 4th, 2019, 12:38 pm

People have been asking whether this is a brief, one-time $7.5 Billion or annual.

The Office of the United States Trade Representative issued a press release that says it is annual.
The award of $7.5 billion annually is by far the largest award in WTO history—nearly twice the largest previous award. The Arbitrator calculated this amount based on WTO findings that EU launch aid for Airbus is causing significant lost sales of Boeing large civil aircraft, as well as impeding exports of Boeing large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets. Under WTO rules, the Arbitrator’s decision is final and not subject to appeal.
https://ustr.gov/about-us/policy-office ... ard-airbus
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Re: US to impose 25% tariff on European wine, cheese, etc.

#216 Post by William Gladstone » October 4th, 2019, 12:47 pm

Frank Murray III wrote:
October 3rd, 2019, 11:40 am
Is it accurate that Champagne is not part of the tariff?
This is what our shipper - who is a shipper that many use in the wine industry, because of their constant inefficiency we have a Champagne order that part has arrived and we routed to New York, and part is sitting in temperature controlled container in Le Havre, that was expected to depart in late September and now they say October 3 and now later in October - (I checked at what point I can shoot them as in 'they shoot horses don't they?' - many in the wine industry would support me)
They wrote to us the following email - yet my staff has been unable to get them on the phone,
"The proposed date of implementation is the 18th of this month, with our best understanding being that many French, Spanish and German wines will be levied with a 25% ad valorem tax.

Notably excepted in the initial list of goods, are Italian Wine, Sparking Wine (including Champagne), Large Format Bottles (over 2lt) and Wines with alcohol in excess of 14% by volume.

For all of those with orders pending that ship via our consols, we have arranged flights to both CA and NY for all settled invoices which should land and clear prior to the 18th.

If you have any queries on outstanding or future orders, please contact me directly and we will do our best to assist. Our fingers remained crossed for a relatively swift diplomatic resolution and we will update as soon as more information becomes available."


Let's just say if you trust the word of this shipper you will eventually - quickly - be out of business.

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Re: US to impose 25% tariff on European wine, cheese, etc.

#217 Post by AndrewH » October 4th, 2019, 1:31 pm

D@vid Bu3ker wrote:
October 4th, 2019, 12:38 pm
People have been asking whether this is a brief, one-time $7.5 Billion or annual.

The Office of the United States Trade Representative issued a press release that says it is annual.
The award of $7.5 billion annually is by far the largest award in WTO history—nearly twice the largest previous award. The Arbitrator calculated this amount based on WTO findings that EU launch aid for Airbus is causing significant lost sales of Boeing large civil aircraft, as well as impeding exports of Boeing large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets. Under WTO rules, the Arbitrator’s decision is final and not subject to appeal.
https://ustr.gov/about-us/policy-office ... ard-airbus
That is also what the WTO arbitrator decision says:

https://www.wto.org/english/news_e/news ... 6arb_e.htm
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Re: US to impose 25% tariff on European wine, cheese, etc.

#218 Post by AndrewH » October 4th, 2019, 1:36 pm

D@vid Bu3ker wrote:
October 4th, 2019, 6:08 am
As an export/import professional in the aerospace industry, I can speculate with some basis. There is a clear difference between the Airbus subsidies and the Boeing defense contracts. Airbus received money from European nations in exchange for essentially nothing. Boeing has contracts that ultimately require delivery of a product. Whether those contracts are “inflated” is nearly impossible to determine. It’s easy to look at the price tag, and say that it’s too high, but there is little in terms of objective criteria on which to base the claim.

It’s also worth noting that Airbus makes military platforms such as the A400M. Over 80 of those planes have been delivered so far, to customers such as the French military. Boeing has a larger defense sector, but that does not automatically create artificial advantage.
That's all well and good, but the WTO has already decided that at least some subsidies to Boeing violated WTO rules. What's left to be determined is the amount of "harm" that the EU can then "recoup" through imposition of tariffs.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#219 Post by AndrewH » October 4th, 2019, 1:57 pm

Greg K wrote:
October 4th, 2019, 12:35 pm
Robert.A.Jr. wrote:
October 4th, 2019, 11:43 am
Marcu$ Stanley wrote:
October 4th, 2019, 10:31 am


based on Zachys prices you'd think they already had all kinds of tariffs priced in...
Respectfully, I don’t get the logic of why the buyer gets a freebie on a tariff neither the seller nor buyer could have anticipated at time of contracting or had any control over it. The seller should give the buyer the option of paying the tariff or rescinding the transaction. Do these consumers even have that kind of profit market built into futures? I would think it would be a big loss.
There's a reason a lot of the agreements I draft have provisions for "tax events" [smileyvault-ban.gif]
There are multiple levels of problems. At a minimum both the producer-retailer and retailer-consumer transactions are affected. Just being able to rescind the retailer-consumer transaction leaves the retailer holding the bag. Rescinding the producer-retailer transaction leaves the producer holding the bottles it thought it had sold.

That said, the producer and retailer (and for this include other intermediaries) are sophisticated parties who can easily allocate risk of such an event occurring between them through contract. However that plays out seems of no particular concern. But the retailer-consumer transaction likely doesn't have a contract specifying such unexpected events . . . so for that reason it doesn't seem unreasonable to allow the consumer an option to get out of the transaction.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#220 Post by Jay Miller » October 4th, 2019, 2:02 pm

D@vid Bu3ker wrote:
October 4th, 2019, 12:38 pm
People have been asking whether this is a brief, one-time $7.5 Billion or annual.

The Office of the United States Trade Representative issued a press release that says it is annual.
The award of $7.5 billion annually is by far the largest award in WTO history—nearly twice the largest previous award. The Arbitrator calculated this amount based on WTO findings that EU launch aid for Airbus is causing significant lost sales of Boeing large civil aircraft, as well as impeding exports of Boeing large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets. Under WTO rules, the Arbitrator’s decision is final and not subject to appeal.
https://ustr.gov/about-us/policy-office ... ard-airbus
Any idea on whether that is annual based on calendar year or based on when first applied?

I.e., would the new 7.5billion kick in January of next year or October of next year?
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Re: US to impose 25% tariff on European wine, cheese, etc.

#221 Post by Francois Olivier » October 4th, 2019, 2:04 pm

@david.buecker
For your info, ten years ago Boeing have stopped his complaint and have negociated with airbus.
Boeing has realised that they would lost more money with airbus complaint vs his complaint.

(NB : A400 program is a nightmare, airbus try to stop it )

But Trump strongly don’t care of the consequence of european plaint : It’s after the election.

French gouvernment is not afraid about these taxe.
Since 2018, trump has been tweeting about increasing french wines taxes because of GAFA taxes, that europe refuse us transgenic soja, and europe refuse to accept us meat with hormones, us chicken washed with bleach

For me, it’s more a tweet or a way for negociate.

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Re: US to impose 25% tariff on European wine, cheese, etc.

#222 Post by Francois Olivier » October 4th, 2019, 2:08 pm

« Notably excepted in the initial list of goods, are Italian Wine, Sparking Wine (including Champagne), Large Format Bottles (over 2lt) and Wines with alcohol in excess of 14% by volume. »

In this case, More and more south french wines, bordeaux (pontet canet) are closed to 14degree

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Re: US to impose 25% tariff on European wine, cheese, etc.

#223 Post by Greg K » October 4th, 2019, 2:10 pm

AndrewH wrote:
October 4th, 2019, 1:57 pm
Greg K wrote:
October 4th, 2019, 12:35 pm
Robert.A.Jr. wrote:
October 4th, 2019, 11:43 am


Respectfully, I don’t get the logic of why the buyer gets a freebie on a tariff neither the seller nor buyer could have anticipated at time of contracting or had any control over it. The seller should give the buyer the option of paying the tariff or rescinding the transaction. Do these consumers even have that kind of profit market built into futures? I would think it would be a big loss.
There's a reason a lot of the agreements I draft have provisions for "tax events" [smileyvault-ban.gif]
There are multiple levels of problems. At a minimum both the producer-retailer and retailer-consumer transactions are affected. Just being able to rescind the retailer-consumer transaction leaves the retailer holding the bag. Rescinding the producer-retailer transaction leaves the producer holding the bottles it thought it had sold.

That said, the producer and retailer (and for this include other intermediaries) are sophisticated parties who can easily allocate risk of such an event occurring between them through contract. However that plays out seems of no particular concern. But the retailer-consumer transaction likely doesn't have a contract specifying such unexpected events . . . so for that reason it doesn't seem unreasonable to allow the consumer an option to get out of the transaction.
A "tax event" does not simply void the transaction.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#224 Post by D@vid Bu3ker » October 4th, 2019, 2:11 pm

A380 program is also a nightmare. Airbus is a badly run company...worse than Boeing.

Boeing does not have control over the WTO complaint, and the never really did.

Jay-it will be some 12 month period, but whether that is from October 18, January 1 or covering the government fiscal year was not stated.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#225 Post by D@vid Bu3ker » October 4th, 2019, 2:17 pm

And Francois, you have somewhat mischaracterized Boeing’s stance.

Here is their most recent comment on both cases, from several months ago: http://www.boeing.com/company/key-orgs/ ... s/wto.page
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Re: US to impose 25% tariff on European wine, cheese, etc.

#226 Post by Alan Rath » October 4th, 2019, 2:19 pm

D@vid Bu3ker wrote:
October 4th, 2019, 12:38 pm
People have been asking whether this is a brief, one-time $7.5 Billion or annual.

The Office of the United States Trade Representative issued a press release that says it is annual.
The award of $7.5 billion annually is by far the largest award in WTO history—nearly twice the largest previous award. The Arbitrator calculated this amount based on WTO findings that EU launch aid for Airbus is causing significant lost sales of Boeing large civil aircraft, as well as impeding exports of Boeing large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets. Under WTO rules, the Arbitrator’s decision is final and not subject to appeal.
https://ustr.gov/about-us/policy-office ... ard-airbus
It sure seems like 7.5B would be used up pretty quickly. According to this site, the total imports from EU are around 500B. The tariff list is only a portion of that, but what's on it must be significantly more than 7.5B.

https://ustr.gov/countries-regions/euro ... pean-union
Last edited by Alan Rath on October 4th, 2019, 2:54 pm, edited 1 time in total.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#227 Post by D@vid Bu3ker » October 4th, 2019, 2:20 pm

AndrewH wrote:
October 4th, 2019, 1:36 pm
D@vid Bu3ker wrote:
October 4th, 2019, 6:08 am
As an export/import professional in the aerospace industry, I can speculate with some basis. There is a clear difference between the Airbus subsidies and the Boeing defense contracts. Airbus received money from European nations in exchange for essentially nothing. Boeing has contracts that ultimately require delivery of a product. Whether those contracts are “inflated” is nearly impossible to determine. It’s easy to look at the price tag, and say that it’s too high, but there is little in terms of objective criteria on which to base the claim.

It’s also worth noting that Airbus makes military platforms such as the A400M. Over 80 of those planes have been delivered so far, to customers such as the French military. Boeing has a larger defense sector, but that does not automatically create artificial advantage.
That's all well and good, but the WTO has already decided that at least some subsidies to Boeing violated WTO rules. What's left to be determined is the amount of "harm" that the EU can then "recoup" through imposition of tariffs.
They have already rejected the bulk of the European claims. There are some tax breaks in Washington state that have been cited as improper, but not much else to date.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#228 Post by D@vid Bu3ker » October 4th, 2019, 2:24 pm

Alan Rath wrote:
October 4th, 2019, 2:19 pm
D@vid Bu3ker wrote:
October 4th, 2019, 12:38 pm
People have been asking whether this is a brief, one-time $7.5 Billion or annual.

The Office of the United States Trade Representative issued a press release that says it is annual.
The award of $7.5 billion annually is by far the largest award in WTO history—nearly twice the largest previous award. The Arbitrator calculated this amount based on WTO findings that EU launch aid for Airbus is causing significant lost sales of Boeing large civil aircraft, as well as impeding exports of Boeing large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets. Under WTO rules, the Arbitrator’s decision is final and not subject to appeal.
https://ustr.gov/about-us/policy-office ... ard-airbus
It sure seems like 7.5B would be used up pretty quickly. According to this site, the total imports from EU are around 500B. The tariff list is only a portion of that, but what's on it must be significantly more than 7.5B.
That largely depends on how many planes people import from Airbus, as those are the big ticket items. A 10% surcharge on a plane is a big number for an airline, so they may delay or cancel orders.

FWIW, the Airbus A320, which is widely flown, uses US (Pratt & Whitney) engines on its current version. A slowdown in Airbus orders will hurt Pratt very badly, and many other US manufacturers.

Of course Airbus has a large facility in Alabama, so that’s one way around the tariffs. It also lessens the impact on the $7.5B, leaving more for wine, olives and cheese.

There are no simple answers here, no matter how many people try to come up with them.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#229 Post by Frank Murray III » October 4th, 2019, 2:48 pm

Damn, I feel for some of you cats that buy a lot of still french wines. Getting sucked up into something like this stinks.
My WOTY candidates for 2019:
2014 Marie Courtin Eloquence BdB Extra Brut
2017 Rivers-Marie PN Platt SC
2017 Kutch Pinot Noir SC PN
2009 Roederer Cristal Brut
2017 Carlisle Zin Mancini Ranch RRV

My best wines of 2018:
2017 Kutch Falstaff Sonoma Coast PN
2012 Marguet La Grande Ruelle Ambonnay

Kindness matters.

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Re: US to impose 25% tariff on European wine, cheese, etc.

#230 Post by John Morris » October 4th, 2019, 3:01 pm

D@vid Bu3ker wrote:
October 4th, 2019, 2:24 pm
Of course Airbus has a large facility in Alabama, so that’s one way around the tariffs. It also lessens the impact on the $7.5B, leaving more for wine, olives and cheese.
I think I read that they'd crafted the tariffs in a way that they wouldn't hurt the Alabama plant -- component parts imported for aircraft assembled here were exempted, or something like that.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#231 Post by James FS » October 4th, 2019, 3:25 pm

FWIW, I was recently in Bordeaux and speaking to a person in the French wine industry about the proposed tariffs at that time, which Trump was touting at 100%. Thankfully, that did not come to pass, however 25% did. I asked her if she thought it was fair for Trump to go after French wine. Surprisingly, her reply was yes. She said that the French had quite a high tariff on American wines shipped into their country but the US had a very low tariff on French wines going the other way. She thought that if the French thought their wines were better they would agree to compete on an even playing field. I also agree. How can two developed economies selling the same product have such differing tariffs? It doesn't end there. For decades and decades the French, and the rest of Europe, underspent on defense because they knew that the US would be able to keep the USSR/Russia at arms length. Now they have bloated social programs they can never hope to pay for and finally we have a President willing to stand up for our people. There is only one producer of French wines I will not go back for at the current tariffs. The rest of them? Let them suffer.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#232 Post by Robert Panzer » October 4th, 2019, 3:27 pm

We will have to wait and see what happens on the 14th before knowing the next steps.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#233 Post by A.Gillette » October 4th, 2019, 3:28 pm

Frank Murray III wrote:
October 4th, 2019, 2:48 pm
Damn, I feel for some of you cats that buy a lot of still french wines. Getting sucked up into something like this stinks.
I feel bad for the small business owners but as a consumer who buys primarily French and German wine, this strikes me as potentially the best buying opportunity of my life. I’m going to take additional storage on Europe. Burgundy en primeur is in January. If this continues demand will shrink. I will load up and secure additional allocations. This is a temporary blip any way you look at it.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#234 Post by D@vid Bu3ker » October 4th, 2019, 3:54 pm

John Morris wrote:
October 4th, 2019, 3:01 pm
D@vid Bu3ker wrote:
October 4th, 2019, 2:24 pm
Of course Airbus has a large facility in Alabama, so that’s one way around the tariffs. It also lessens the impact on the $7.5B, leaving more for wine, olives and cheese.
I think I read that they'd crafted the tariffs in a way that they wouldn't hurt the Alabama plant -- component parts imported for aircraft assembled here were exempted, or something like that.
Tariffs on component parts would have also screwed Boeing.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#235 Post by julianseersmartin » October 4th, 2019, 4:03 pm

Has anyone spoken to Envoyer about this?

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Re: US to impose 25% tariff on European wine, cheese, etc.

#236 Post by D@vid Bu3ker » October 4th, 2019, 4:17 pm

James FS wrote:
October 4th, 2019, 3:25 pm
FWIW, I was recently in Bordeaux and speaking to a person in the French wine industry about the proposed tariffs at that time, which Trump was touting at 100%. Thankfully, that did not come to pass, however 25% did. I asked her if she thought it was fair for Trump to go after French wine. Surprisingly, her reply was yes. She said that the French had quite a high tariff on American wines shipped into their country but the US had a very low tariff on French wines going the other way. She thought that if the French thought their wines were better they would agree to compete on an even playing field. I also agree. How can two developed economies selling the same product have such differing tariffs? It doesn't end there. For decades and decades the French, and the rest of Europe, underspent on defense because they knew that the US would be able to keep the USSR/Russia at arms length. Now they have bloated social programs they can never hope to pay for and finally we have a President willing to stand up for our people. There is only one producer of French wines I will not go back for at the current tariffs. The rest of them? Let them suffer.
The EU tariff on US wine is 29 cents per bottle.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#237 Post by Joe Chanley » October 4th, 2019, 4:47 pm

julianseersmartin wrote:
October 4th, 2019, 4:03 pm
Has anyone spoken to Envoyer about this?
Traded an email with Greg. They’ve been trying to bring in as much French wine as possible ASAP. Still a lot tbd.

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Re: US to impose 25% tariff on European wine, cheese, etc.

#238 Post by YLee » October 4th, 2019, 5:20 pm

I'm going to assume this might help some people with their Cellar reduction plans.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#239 Post by Tom G l a s g o w » October 4th, 2019, 5:41 pm

Eric Ifune wrote:
October 4th, 2019, 4:57 am
Since I currently only buy Portuguese wines, I have no problem. Perhaps you all should too. As good as anything in France for a third the price even without tariffs. :)
Name specific wines with vintages.

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Re: US to impose 25% tariff on European wine, cheese, etc.

#240 Post by Dan Kravitz » October 4th, 2019, 5:42 pm

to D@vid Bu3ker,

Thanks for your very informed input. I did not know that Airbus also did defense work, albeit at a tiny fraction of the revenue Boeing derives from it.

This is a Big Deal for my company, Hand Picked Selections. As in, it might put us out of business.

As the Chinese curse: May you live in Interesting Times.

Nobody knows how the market will react to price increases of 10% (absolute minimum, assuming producers, importers and distributors all absorb some of the pain) to 25% (assuming everything is passed through).

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Re: US to impose 25% tariff on European wine, cheese, etc.

#241 Post by D@vid Bu3ker » October 4th, 2019, 6:07 pm

FWIW, Boeing is only about 25% military revenue.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#242 Post by Tom G l a s g o w » October 4th, 2019, 6:09 pm

D@vid Bu3ker wrote:
October 4th, 2019, 6:07 pm
FWIW, Boeing is only about 25% military revenue.
Sly, no?

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Re: US to impose 25% tariff on European wine, cheese, etc.

#243 Post by Neal.Mollen » October 4th, 2019, 6:19 pm

D@vid Bu3ker wrote:
October 4th, 2019, 6:07 pm
FWIW, Boeing is only about 25% military revenue.
And had none until the bought MDC and Raytheon, right?
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Re: US to impose 25% tariff on European wine, cheese, etc.

#244 Post by D@vid Bu3ker » October 4th, 2019, 6:25 pm

Boeing does not own Raytheon. Raytheon is merging with UTC next year.

They have done military derivative work (i.e. military transport, cargo or refueling planes based on existing platforms such as 767) among other things for a very long time. They did buy into the military helicopter business.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#245 Post by Brady Daniels » October 4th, 2019, 6:33 pm

D@vid Bu3ker wrote:
October 4th, 2019, 4:17 pm
James FS wrote:
October 4th, 2019, 3:25 pm
FWIW, I was recently in Bordeaux and speaking to a person in the French wine industry about the proposed tariffs at that time, which Trump was touting at 100%. Thankfully, that did not come to pass, however 25% did. I asked her if she thought it was fair for Trump to go after French wine. Surprisingly, her reply was yes. She said that the French had quite a high tariff on American wines shipped into their country but the US had a very low tariff on French wines going the other way. She thought that if the French thought their wines were better they would agree to compete on an even playing field. I also agree. How can two developed economies selling the same product have such differing tariffs? It doesn't end there. For decades and decades the French, and the rest of Europe, underspent on defense because they knew that the US would be able to keep the USSR/Russia at arms length. Now they have bloated social programs they can never hope to pay for and finally we have a President willing to stand up for our people. There is only one producer of French wines I will not go back for at the current tariffs. The rest of them? Let them suffer.
The EU tariff on US wine is 29 cents per bottle.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#246 Post by D@vid Bu3ker » October 4th, 2019, 6:46 pm

It’s my job. (No, really...it’s my job.)
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Re: US to impose 25% tariff on European wine, cheese, etc.

#247 Post by Neal.Mollen » October 4th, 2019, 6:50 pm

D@vid Bu3ker wrote:
October 4th, 2019, 6:25 pm
Boeing does not own Raytheon. Raytheon is merging with UTC next year.

They have done military derivative work (i.e. military transport, cargo or refueling planes based on existing platforms such as 767) among other things for a very long time. They did buy into the military helicopter business.
Right, sorry, I was thinking of the chunk of Rockwell it bought. My mistake
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Re: US to impose 25% tariff on European wine, cheese, etc.

#248 Post by Pat Martin » October 4th, 2019, 8:10 pm

D@vid Bu3ker wrote:
October 4th, 2019, 4:17 pm
James FS wrote:
October 4th, 2019, 3:25 pm
FWIW, I was recently in Bordeaux and speaking to a person in the French wine industry about the proposed tariffs at that time, which Trump was touting at 100%. Thankfully, that did not come to pass, however 25% did. I asked her if she thought it was fair for Trump to go after French wine. Surprisingly, her reply was yes. She said that the French had quite a high tariff on American wines shipped into their country but the US had a very low tariff on French wines going the other way. She thought that if the French thought their wines were better they would agree to compete on an even playing field. I also agree. How can two developed economies selling the same product have such differing tariffs? It doesn't end there. For decades and decades the French, and the rest of Europe, underspent on defense because they knew that the US would be able to keep the USSR/Russia at arms length. Now they have bloated social programs they can never hope to pay for and finally we have a President willing to stand up for our people. There is only one producer of French wines I will not go back for at the current tariffs. The rest of them? Let them suffer.
The EU tariff on US wine is 29 cents per bottle.
Don’t confuse him with any facts.
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Re: US to impose 25% tariff on European wine, cheese, etc.

#249 Post by Robert M yers » October 4th, 2019, 8:46 pm

Couldn’t the procurement of luxury items just hold off on import until after the allowed amount has been met each year? Let the industry who cannot afford to wait pay the tax first...will it become a waiting game?

Dan, my wife said is was in the grocery today buying some wine and a guy came in and bought all the Pegau cdp and cdr. Somehow was under the impression that it wasn’t going to be imported anymore. I’m sure he had his facts mixed up with this mess, but I wonder if there might be runs on certain wines?

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Re: US to impose 25% tariff on European wine, cheese, etc.

#250 Post by Tom Reddick » October 4th, 2019, 9:58 pm

Good evening all,

Dan- thank you for your reply and a very thoughtful post all around.

I have been on the phone and email much of the day with a number of parties and wanted to share a few things with the group in case it helps.

1. Turns out 10-18-19 is the magic deadline to have things here. Big backup on water shipments, but air still getting through timely and where practicable it appears some brokers and importers are resorting to air with what they can (and so far absorbing the cost- generously in my opinion.) Others are offering free storage for an extended period to wait out the situation (also generous.) Everyone I have spoken with today is making some effort in some way.

2. There seems to be universal agreement champagne is not included in the tariff scheme.

3. As evidenced by this thread- the situation is very fluid and anything could happen. Everyone is free to react as they wish- but personally I take it as a good thing that so many vendors are responding so quickly and proactively in some manner (for the most part today- I was getting calls, not making them), even if it means I may be on the hook down the line. This is one of those rare situations it is hard to plan for, and it should be fairly obvious that 25% sucks most profit out of the average overseas futures or pre-arrival deal. I see some of you are already lining up to expect to suffer no financial or timing consequences- and good luck to you. I plan to keep on being that guy who gets treated very well despite not being a huge spender because I am pragmatic and willing to share the hit when something really unusual happens.

Best of luck to everyone exposed as this evolves further.
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