In France, tension is mounting over American taxes. The Federation of Exporters of Wines and Spirits (FEVS) asked for the creation of a compensation fund.
The United States keeps customs duties on products at 25%. This action is part of the retaliation for the European American aviation dispute.
United States administration decided to apply punitive customs tariffs on European products in 2019. The value amounts to 7.5 billion dollars, based on the subsidies received by Airbus and judged undue by the World Trade Organization (WTO).
Among the products affecting customs tariffs are French wine and certain types of spirits. These alcohols are subject to a 25% surtax. The United States is the main export market for these products. On Friday, the US administration reiterated that the surtax should be maintained.
The FEVS announced in a statement the consequences of the additional customs tariffs. “They represent a major danger to the survival of our companies. And more generally to the wine sector. Although Airbus is at the root of this conflict, it is wine that is targeted by the sanctions“.
Antoine Leccia, the president of the FEVS called on Emmanuel Macron to “solemnly unblock without waiting 300 million euros in the form of a compensation fund urgently.”
Consequences of customs duties
The consequences of retaliation are obvious to the FEVS. They have recorded a drop in French wine exports of 17.5% in the last quarter of 2019 alone, in other words, a loss of turnover of over 20%.
Maintaining these rates could lead to losses of more than 50% of turnover for at least a third of companies in the sector. This was confirmed by the FEVS during a press conference at the Wine Paris-Vinexpo event.
The profession is concerned in view of a fragile year 2020 in the face of US sanctions, coronavirus in China and Brexit, which are disrupting the first three export markets.
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