Second Review of Action: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute (Docket No. USTR-2020-0023)
NABI Press Release – July 27, 2020
National Association of Beverage Importers Opposes Tariffs on EU Wines, Spirits, and Beer and Nonalcoholic Beer in Letter to USTR Review of Action in Airbus WTO Dispute
Since the first public hearing in May 2019 on the Airbus dispute through the multiple comment periods and the public hearing on the French DST in January 2020, the wine, spirits, and beer (including nonalcoholic) importers, workers, and consumers in huge numbers opposed these tariffs for the harm they do to American companies and American jobs. In fact, these harms have happened since the retaliatory tariffs were imposed as additional duties.
Here are a few real-world examples from NABI members on how the retaliatory tariffs are harming American workers and the U.S. economy:
One importer has laid off 20 employees and reduced the salaries of all remaining employees by 15 percent.
PPP loans have enabled some importers to avoid layoffs and furloughs now but if circumstances remain unchanged in 90 to 120 days, several importers report they will have no option other than lay off employees.
Many importers have reduced or eliminated all spending on market, advertising, and promotional activities, thereby, indirectly causing layoffs at independent advertising companies.
Many importers report hiring freezes and cancelling job promotions, salary increases, and/or merit bonuses. Some are reviewing and reassessing employee benefits. “These harms argue for a reduction or removal of the current retaliatory tariffs and definitely counsels against increasing the current 25 percent additional duty on certain wines and distilled spirits or expanding the retaliatory tariffs to other beverage alcohol products” said Robert M. Tobiassen, NABI President. “This is a ‘Main Street’ issue for these people” he added. NABI urged USTR to remove wines, spirits, and beer (including nonalcoholic) from the additional duty consideration in this action. At a minimum, the current additional duties on certain wines and distilled spirits should be reduced to 15 percent for parity of impact on the importer with the 15 percent additional duty on large civil aircraft. “No reason exists justifying a tariff that imposes a $30 million payment on a $200 million aircraft yet imposes a $50 million payment on the importer of $200 million in wine and spirits—all in a trade dispute solely aimed at large civil aircraft” said Tobiassen.
While the COVID-19 crisis is also adversely impacting importers, it cannot be seen as an excuse for dismissing the business harms suffered by importers from the additional duties. USTR must recognize the economic environment in which the retaliatory tariffs are played out. As one importer said, “During these challenging times, USTR should be helping make our business easier and not harder.”
Last Friday, Airbus announced that it had reached agreement with the Governments of Spain and France on revisions to the A350 Repayable Launch Investments contracts underlying part of this trade dispute. Previously, Germany and the United Kingdom indicated revisions made brought them into compliance. USTR should recognize these movements to come into compliance and not respond with increased additional duties on currently tariffed products and not expand additional duties to new products including gin, vodka, and beer and nonalcoholic beer. USTR itself recognized the significance of coming into compliance when Washington State repealed it reduced tax rate law involved in the Boeing Dispute. NABI urged USTR to respond, at a minimum, by reducing the current additional duties to 15 percent and enter into settlement negotiations to resolve the remaining issues.
For further information, please contact: Robert M. Tobiassen, NABI President at firstname.lastname@example.org , www.bevimporters.org
Download a copy of the letter here: