Updated: Jun 18, 2020
(NABI Press Release No. 2019-3) | National Association of Beverage Importers, Inc. | Washington, DC
NABI Testifies Against Retaliatory Tariffs on Imported Wines, Distilled Spirits, and Non-alcoholic Beers in USTR Hearing
Today, the National Association of Beverage Importers, Inc. (NABI) testified at the Section 301 Committee of the United States Trade Representative (USTR) in Washington, DC against the proposed retaliatory tariffs on imported grape wines (regardless of alcohol content or effervescence) non-alcoholic beers, liqueurs and cordials, and grape derived distilled spirits (that is, brandy).
NABI President Robert M. Tobiassen stressed that the retaliatory tariffs should be limited to aeronautics equipment because that is the underlying trade dispute. Airbus operations in the United States import parts and equipment from the EU to assembly its aircraft here and those goods should bear the entire tariff burden in order to compel the EU to cease the wrongful subsidies to Airbus. This directly attacks the unjustified competitive harm to Boeing. If other goods are covered by retaliatory tariffs, then they should do the least damage to the interests of American consumers, industries, economy, and Federal Government public policies.
NABI President Tobiassen said “the Federal Government should speak with one voice and not impose retaliatory tariffs that undercut other Federal public policies.” Imported alcohol beverages raised significant excise tax revenues for the Treasury and nothing in trade policy should undercut that sound fiscal policy. The Department of Health and Human Services along with the National Institute of Alcoholism and Alcohol Abuse has a strong public health policy on moderate consumption which is advanced by non-alcoholic beers. Non-alcoholic beers allow consumers to join with their friends in social settings and have a range of social beverages without alcohol available for their enjoyment. The Department of Transportation has drunk driving prevention public policies that are advanced by designated drivers consuming non-alcoholic beers.
The wide range and brand diversity of imported distilled spirits and wine shows that consumers see many of these imported products as having unique characteristics not available to them in domestic alcohol beverage products. For fiscal year 2018, TTB approved 185,072 certificates of label approval (COLAs) of which 86,958 represented domestic products and 98,114 represented imported products. Consumers want these unique products and are demanding them.
Imported distilled spirits and wines and domestic distilled spirits and wines are not necessarily interchangeable and fungible in all brand cases. This is not true of many other goods and commodities on the retaliation tariff list. There is no sound policy reason to deny American consumers access to these unique and different imported products not otherwise available to them with a domestic counterpart or from a country other than an EU Member States. Nor should they have to pay higher prices for their preferred tipple. Consumers hold personal preferences that are subjective and deserve to be respected by trade negotiators. Tariffs on these products are essentially taxes on happiness.
NABI joined 48 trade associations and businesses testifying on all aspects of the proposed tariffs and was the only alcohol beverage association to present oral testimony. Final written comments are due by May 28, 2019. NABI is preparing additional comments and is working with DISCUS and other trade associations on a common approach to oppose these tariffs.
The Section 301 Committee is chaired by USTR and has members from the Treasury Department, State Department, Department of Agriculture, Small Business Administration, Department of Transportation, Department of Commerce, and Department of Labor. After all of the testimonies and comments are received on May 28th, the Section 301 Committee will prepare a final retaliatory tariff list with percentages of the rates of the retaliatory tariffs.