A new US president may turn the tide on tariffs on EU wines.
The citizens of the United states spoke last week and voted to elect Democratic nominee Joe Biden as the next US President, altering how the country will be governed over the next four years.
Under the previous regime, in October 2019, 25% tariffs were put on EU wines (Germany, Spain, UK, France) in retaliation to illegal EU Airbus subsidies. Larger tariffs were rumoured but never came to fruition. Still, these 25% tariffs have altered the landscape of the secondary market as the cost of buying European wines has risen. Italy, a country omitted from the tariffs, has seen its market share soar this year. Further, any wine over 14% is excluded, meaning warm weather regions producing big (ABV) wines have also been in the spotlight – Robert Parker would be hesitatingly pleased.
More recently, the World Trade Organization cleared the path for the EU to put tariffs back on the US, up to $4B, in response to subsidies for Boeing. While the EU determines if and what will be hit by tariffs, the idea of putting tariffs on US wine has not been ruled out.
Currently US wines remain free of additional tariffs. Liquidity in the region has been rising and along with it, market share. Biden may cool trade tensions, but nothing can be taken for granted in this febrile atmosphere. Better to strike while the iron is hot?
Attached below are 380 of the ‘Top Offers’ of US wines – around market price.
Chart 1: US trade share vs. US unique wines traded
