iDealwine is appealing to the President for his support of the wine industry, currently facing the Trump administration’s threat of high taxation on wine exported to the United States.
As a key player in the distribution of grands crus at the heart of the wine industry since 2000, we would like to share with you our concern faced with the threat of a supplementary tax on French wines exported to the American market.
The wine sector was already shaken at the end of last year by the decision to impose a 25% supplementary ad valorem tax on French wines exported to the United States. Our industry now finds itself to be a collateral victim in a trade war in which it plays no part. This tax, in action since 18th October 2019, was applied as a response from the Trump administration to a dispute between Airbus and Boeing. A conflict, therefore, with no relation to the viticultural sector.
Today, a new threat has emerged, since in retaliation to the introduction of the GAFA tax, President Trump intends to increase customs duty on European wines, bringing it to 100% of the goods’ value.
We completely understand that the aeronautic sector is strategic. However, it remains the case that the wine industry, which employs 500,000 people in France, is in second place for our exportation trade balance, behind the aeronautic sector. The United States represent the most important export market of French wines in terms of value, with sales reaching €3.2 billion in 2018.
At the level of our company, iDealwine, the consequences are severe, since we are a buying and selling platform for grands crus, the vast majority of them French. We are proud to contribute to the diffusion of our vineyards’ treasures, since the wines we offer are distributed to 60 countries. After Asia, where we have been active since 2013, the United States represent a crucial axis in our development. We have already made commercial investments there that we intend to increase on during the months to come with the opening of an office, with recruitment planned to address this promising market, so enthusiastic about French grands crus. The 25% tax, put in place last October, already caused us to delay our projects in order to evaluate the reaction of our current clients in light of the changes. A 100% tax would bring these expansion projects to an abrupt and definitive end. We are certainly not alone in this situation.
Last month, the United States began a process to evaluate the increase of customs duty. During this consultation period, which will come to a close on 13th January, American consumers and workers are being asked to comment on this decision, with the aim of convincing the government to renounce the imposition of punitive tariffs on France. The engagement on the part of an industry that employs 17.74 million people has been considerable.
On our part, we strongly hope that you and your government will do all that is possible to find a solution to these commercial conflicts that do not concern our sector, a sector that does not need another risk to face during the unstable period we are already living through (looking to Brexit, political instability in Asia, especially in Hong Kong, and current events in France).
We would like to thank you in advance for any support you can bring to a sector that is dynamic, a bearer of strong values and the ‘French spirit’ that is so dear to you.