I talked with Joni Rials, CEO of Seek and Sip Travel to help break down the wine tariffs to our Shall We Wine readers.
R: Joni, can you break it down for the readers? What are the tariffs about?
J: Sure!
1st tariff Airbus/Boeing tariff is a 25% on some EU goods/countries such as French wine, Italian cheese and single-malt Scotch whisky. This tariff was this administration’s response to the EU not eliminating or lowering subsidies for Airbus (a direct competitor of Boeing).
The 2nd proposed tariff of 100% would have been levied on all wine products from most of the countries we love. Spain, Italy, France, Germany etc.. and also on mostly all EU goods). This was in response to a 5% Digital Service Tax (DST) France would levy against US data companies FB/Apple/Amazon/Google.
As of today, both the US and France have agreed to continue negotiations of the DST trade policy. France agreed to delay the 1st payment until the end of 2020 but it seems as though the DST will stand.
By the way, 25% tariff is still entact because that is for the Airbus/Boeing issue.
R: How will it impact wine distributors?
J: Tariffs aren’t like business taxes because you can’t delay them. They must be paid before delivery of goods. The smaller companies would not be able to do that. We’re talking about tariffs that were $25,00 now increasing to $75,000 or more with no increase in revenue! The 2nd tax would wipe the smaller distribution businesses out!
As for smaller wine producers, this would also affect US wine because smaller vineyards utilize small distributors because they don’t produce the necessary volume to join the big distributors. Without distribution, they would be forced to consolidate or close.
R: How do you believe the proposed tariffs will impact your wine travel business?
J: The events and marketing side of my business would slow down severely or the cost would increase dramatically. I have been planning to open a retail location and that will not happen if the tariffs are approved. The city would lose another small business that would have provided jobs, advanced skills training and community support to the area where we would have served.
R: Where can we find more info on SST?
J: Here are some links that I’ve followed for more info:
Reuter’s: Tariffs in French Imports
United States Trade Resolution Docket for Large Aircraft Tariff
Contact Info:
Info@seekandsip.com
Facebook & Instagram: @seekandsiptravel
