EU wine, spirits to face 15% US tariff from August 1, EU says
A framework trade deal between Brussels and Washington on Sunday agreed a 15% tariff for most EU imports into the United States, although some sectors were expected to be exempted.
The U.S. tariff on European wine and spirits is currently 10%. Brussels is keen to reduce that to zero or, for wine at least, to the Most Favoured Nation (MFN) rates that are set on a fixed cost per litre basis, rather than in percentage terms.
"The Commission remains determined to achieve and secure the maximum number of carve-outs including ... wine and spirits," Commission spokesperson for trade Olof Gill said.
"It is not our expectation that wine and spirits will be included as an exemption in the first group announced by the U.S. tomorrow. And therefore that sector will be captured by the 15% ceiling," he said.
Wine-makers said the tariff, even if temporary, would hurt the sector, especially when combined with the stronger euro.
"The 15% duty on EU wines, even if applied for some months until the negotiations are closed, would cause significant economic losses not only for EU wine producers but also for U.S. businesses involved throughout the supply chain," said Ignacio Sanchez Recarte, secretary general of European wine producers group CEEV.
"When combined with the currency shift in the dollar/euro exchange rate, the overall financial burden on the sector could reach 30%. Investments will be halted and export volumes will decline while waiting for the final agreement," he said.
U.S. Distilled Spirits Council President and CEO Chris Swonger also urged a quick deal to bring tariffs down to zero.
"It is extremely disappointing and utterly exasperating that the U.S. and EU have not yet come to an agreement on spirits, which is an easy win for the United States that will help secure our economic vitality during this challenging time for the hospitality industry," Swonger said.
"It is critical for our great American distilleries, farmers and hospitality workers across the country that President Trump secure a permanent return to zero-for-zero tariffs on spirits with the European Union," he said in a statement.
The U.S. is to publish an executive order on Friday, implementing the framework trade deal that was agreed on Sunday between U.S. President Donald Trump and European Commission President Ursula von der Leyen.
Separately, the EU and the U.S. are to publish a joint statement spelling out the details of the framework deal.
A senior diplomat said that talks on wine and spirits tariffs would continue after the joint statement. "(This will take place) probably in the autumn," the diplomat said.
Until recently, spirits had benefited from zero tariffs between the U.S. and EU following an agreement in 1997 that also included other countries such as Canada and Japan.
That lasted until 2018, when the EU response to U.S. steel and aluminium tariffs included increased duties on U.S. bourbon and other spirits. These were suspended in 2021.
U.S. MFN rates for wine are 19.8 cents per litre for sparkling and 6.3 cents per litre for most other wine, which equates to very low rates in most cases.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
38 minutes ago
- The Guardian
Dozens more countries face higher taxes on exports to US as new Trump tariffs come into effect
Dozens of countries face higher taxes on their exports to the US now that Donald Trump's latest wave of country-specific tariffs have come into force. The sweeping 'reciprocal' levies announced by the White House a week ago – just before a previous 1 August deadline was due to elapse – were in place as of a minute past midnight Washington time on Thursday. Just before midnight, Trump claimed on social media that billions of dollars would start flowing into the US as a result of the tariffs. 'The only thing that can stop America's greatness would be a radical left court that wants to see our country fail,' the president wrote in capital letters, referencing an ongoing case in the US court of appeals which is considering whether he exceeded his authority in imposing the 'reciprocal' tariffs. The rates range from 41% on war-torn Syria to 10% for the UK and will be applied on top of the usual tariffs applying to products imported to the US. This means that while Brazil's 'reciprocal' level is 10%, its total rate is 50% after an executive order imposed a 40% additional levy from Wednesday linked to the prosecution of the country's former president Jair Bolsonaro. The EU is the only trading partner where its baseline rate – set at 15% after a framework deal – will include previous tariffs. It means, for example, cheeses that are normally hit with import duties of 14.9% will be taxed at 15% and not 29.9%. Since the announcement late on Thursday last week, governments around the world have been racing to try to reach deals to avert border taxes they fear could deter investors and result in job losses. The Swiss president, Karin Keller-Sutter, was in Washington on Tuesday for two days of meetings with senior Trump administration officials to try to reverse a 39% levy that blindsided the government when it was unveiled. Meanwhile, India's 25% tariff rate could rise to a total of 50% after Trump signed an executive order on Wednesday imposing an additional levy in retaliation for the country's purchase of oil from Russia. Delhi has 21 days to respond. Trump has threatened to use the same tactic on other countries that supply Russia. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Trump first unveiled the raft of country-specific rates on 2 April, a date he called 'liberation day', claiming the rest of the world had looted the US for decades. After a 90-day pause brought in a week later and another four-week truce announced on 7 July, he confirmed the new set of rates last Friday. Some trading partners secured reductions via negotiations or by striking deals, including the UK, Thailand, Cambodia, Vietnam, Indonesia, the Philippines, Japan, South Korea, Pakistan and the EU. Other countries are negotiating tariffs not covered by last week's announcement. Canada has been hit with a total rate of 35% that came in last Friday, while Mexico avoided an increase from its 25% rate on the same date after it was granted a 90-day extension. China faces a 30% rate while negotiations continue before its separate 12 August deadline for higher rates. On Wednesday, Trump also warned that the US would impose a tariff of about 100% on semiconductor chips imported from countries not producing in America or planning to do so.
Daily Mirror
4 hours ago
- Daily Mirror
Donald Trump breaks silence on major Putin summit with three-word review
Donald Trump has finally addressed the possibility of a face-to-face meeting with Russian President Vladimir Putin, hours after reports of a summit started to circulate Donald Trump has finally spoken out about the buzz surrounding a potential summit with Vladimir Putin, mere hours after speculation about such a meeting began to make headlines. During a press conference at the White House on Wednesday evening, Trump indicated that there is a "very good prospect" for what could be a momentous one-on-one with Putin. While the press conference in the Oval Office was primarily about Apple's multi-billion-dollar investment in the US, the topic shifted when Trump was probed by journalists regarding the rumours of a summit with Putin. He responded: "There is a very good prospect that we will [meet]." This development unfolds as Trump dealt Russia two significant setbacks within hours earlier today, despite suggestions that he might be willing to engage with Putin as early as next week. The White House reaffirmed on Wednesday its commitment to imposing secondary sanctions on Moscow, with this Friday, August 8, marking the deadline set by Trump for Putin to cease hostilities in Ukraine. Washington had already issued a stark warning that it would severely impact the Russian economy if Moscow did not actively seek peace in Ukraine. Today, the White House doubled down on its commitment to implement regulations that will bar third parties from engaging in trade with entities under Russian sanctions—a policy set to take effect in a mere 48 hours, reports the Express. This firm stance was maintained despite President Trump's remarks that his special envoy Steve Witkoff's recent dialogue with Putin "went well". Taking to Truth Social this afternoon, President Trump posted: "My Special Envoy, Steve Witkoff, just had a highly productive meeting with Russian President Vladimir Putin. "Great progress was made! Afterwards, I updated some of our European Allies. Everyone agrees this war must come to a close, and we will work towards that in the days and weeks to come. Thank you for your attention to this matter!". Earlier in the day, President Trump had branded Russia as an "extraordinary threat" to US national security and foreign policy. He announced this as he enacted an executive order to slap an additional 25% tariff on Indian imports of Russian oil. President Trump clarified his position, stating: "I determine that it is necessary and appropriate to impose an additional ad valorem duty on imports of articles of India, which is directly or indirectly importing Russian Federation oil." The US administration is aiming to cut off a significant source of revenue for the Kremlin by targeting Russian oil sales, thereby crippling their ability to fund the ongoing conflict in Ukraine.
BBC News
6 hours ago
- BBC News
How Europe is vying for rare earth independence from China
For almost 80 years rare earth metals have been pumped out of this industrial plant in La Rochelle on France's west as the materials become more and more crucial to the global economy, chemicals firm Solvay is expanding its processing plant next to the glistening Atlantic Ocean to meet surging demand across group of 17 metals are essential to huge amounts of modern technology such as smartphones, electric vehicles and wind turbines and MRI scanners. However, around 70% of rare earths mining, and 90% of refining, happens in China, as a result of years of support from the Chinese like many other parts of the world, is trying to reduce its dependence on importing these key metals from China. The future of Solvay's plant will be critical to those ambitions."This is a market that is growing fast, and, also, there is a greater demand for shorter supply chains," says Solvay's CEO Philippe Covid pandemic and the war in Ukraine have made companies and politicians try to remove some of the vulnerabilities in their supply chains."When you have a material that is coming almost 100% from one specific location, if you are dependent on this, you want to diversify your sourcing. This is what we can offer," explains the boss of the Belgian chemicals giant. That is why the EU's Critical Raw Materials Act came into force last year. It sets targets for reducing dependence on imports for the extraction, processing and recycling of the most important substances by only has two rare earth processing facilities, one in Estonia and this one in western France. It is the only plant outside of China that can process all 17 different rare earths. The increased investment in the facility comes as it is moving away from focusing on supplying rare earths for catalytic convertors, to instead focus on soaring demand for the magnets that are essential to electric car batteries, advanced electronics and defence now the focus is on recycling rare earths that are already in Europe. "We think that we can probably produce 30% of the rare earths needed by Europe just by recycling end of life motors and other equipment," says Mr demand continues to grow that will change, and more virgin material will be needed from countries such as Brazil, Canada and Australia. There are no operational rare earth mines in Europe. Projects in Norway and Sweden are amongst the most advanced, but its likely to be another decade before they are ready."I think it's absolutely necessary to have our own mines, not necessarily a lot of them, because we can have a mix, but it's important to have our own sourcing," says Mr is a complex process to turn those materials into the powders that are the end product of this requires approximately 1,500 processes, and given the unique capabilities of this facility, outsiders are rarely allowed in. This is due to concerns about rivals potentially gaining some of the knowledge that is currently otherwise concentrated in we've been granted special access to one of the separation rooms that are a vital part of the closely-guarded know-how built up since this plant started operating in 1948."The objective of the liquid separation unit will be to purify cerium on one side, lanthanum on the other side," explains production manager Florian Gouneau as we walk up a flight of metal stairs."It's basically like if you have a multi fruit juice with orange juice, apple juice, pineapple juice, the objective of the liquid separation unit will be to separate apple juice on one side, orange juice on the other side, and so on." The room itself is about the size of a football pitch, and home to row after row of huge metal vats within which chemical reactions force the different rare earths 40-hectare site employs more than 300 people. A vast collection of industrial buildings are joined together by an array of metal pipes moving substances through the processes. Significant amounts of chemicals are stored in cylindrical tanks, and give the facility a distinct smell that is similar to a freshly-cleaned hospital ward.I ask Mr Gouneau if he's used to it after working here for three years. "What smell?" he jokingly replies. The site is also distinctly noisy and warm as vents continually hum. They expel hot air into an atmosphere that is also punctuated by seagulls unaware that they have a unique view of one of the most important frontlines in the global French government is supporting this facility with about €20m ($23m; £17.4m) in tax credits."Having a dependency on a single source – it is dangerous because you cannot know what will happen to this source for various reasons," says Benjamin Gallezot, who is President Macron's adviser on strategic minerals and metals."It can be a geopolitical reason, but it can also be, you know, natural disaster or whatever."In the blazing sun he won't be drawn on the impact of China trying to restrict access to its rare earths exports, a subject at the heart of continuing US China trade talks. But Mr Gallezot does say: "I think economic cooperation is clearly more powerful than just only pure competition." The European Parliament wants the European Commission to do more to reduce that dependence on Chinese rare earths. It says Beijing's controls are "unjustified" and "intended to be coercive".On a recent visit to Germany, China's foreign minister Wang Yi said it was his country's "sovereign right", as well as being "common practice", to control exports of goods that have both commercial as well as military stance explains why securing access to raw materials has been at the heart of recent EU trade deals, such as the one it signed with Argentina, Brazil, Paraguay and Uruguay last firms in the rare earths sector say they need more government support if they are going to catch-up with their Chinese Moreno, the CEO of Australia's Viridis Mining, says this backing, both regulatory and financial, "is the key right now". His business is developing a vast rare earths mine in Brazil, which hopes to provide as much as 5% of the world's rare earths. One reason China has forged ahead of the rest of the world regarding rare earths is that it has been more willing to handle the radioactive pollution that can be caused by the mining and also has rare earth operations in China, and Mr Kehren says "there are solutions to do it in a very responsible way without polluting". He adds: "It costs a bit of money, so you need to be ready to pay a little bit more."Pricing is key to the future of the expanded La Rochelle plant, he says. He needs his customers, who supply carmakers and big tech firms, to commit to buying certain volumes of rare earths at certain EU has written its targets for lowering imports into law, but he wants to see how they make them happen. "Are there going to be [financial] incentives, for example, for the different players in this value chain to source rare earth elements from Europe?"Doing so would, he says, be good for the continent's economy.
