The U.S. Trade Representative announced Friday its intensions to hit $1.3 billion worth of French products with a 25% tariff, but omitted French Champagne from the punitive taxes, much to the gratitude of U.S. importers and distributors who are already struggling with tariffs on European wine. The USTR had threatened to hit Champagne along with soap, cosmetics, handbags and other items, but it left out the bubbly in the final determination, which won’t be implemented until January. The tariffs are aimed at punishing France for its plan to hit U.S. internet companies with a digital service tax. That’s a separate issue from retaliatory U.S. tariffs on European wine and other goods over the EU’s subsidization for Airbus. “It’s a small but important victory,” Benjamin Aneff, president of the U.S. Wine Trade Alliance told Agri-Pulse about the Champagne decision. “The major lift in front of us is the World Trade Organization Airbus case. We hope the USTR is starting to understand that tariffs on imported wine do significantly more damage to U.S. businesses than their targets overseas.” The considered tax on Champagne could have hurt U.S. importers, distributers and producers much the same way as the U.S. tariffs on European wine are hurting the sector. U.S. wine imports from France have already dropped off by about 50% while the French diverted exports to other countries. And when U.S. distributors hurt, so do domestic producers that rely on them, Aneff said.
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