Trump imposes 25 percent tariff on cognac, wine, airplane parts from EU

The Trump administration on Wednesday announced new 25 percent tariffs on a variety of European goods like cognac, wine and airplane parts amid an ongoing trade dispute over aerospace subsidies.

Targeted items include nonsparkling wine, nongrape brandies and airline equipment from France and Germany.

The new tariffs, which take effect Jan. 12, are the latest escalation in a multiyear fight between the U.S. and European Union over government subsidies to airplane manufacturers Airbus and Boeing.

This week’s move by the Trump administration follows a World Trade Organization approval of a complaint that allows the EU to impose retaliatory tariffs on $4 billion worth of U.S. imports.

The EU complaint was in response to the U.S. imposing tariffs on $7.5 billion of European imports.

The Trump administration argued Wednesday that the EU went too far with its retaliatory tariffs, saying it based them on outdated economic data that did not account for the slump in trade caused by the coronavirus pandemic.

“The result of this choice was that Europe imposed tariffs on substantially more products than would have been covered if it had utilized a normal period,” the U.S. trade representative’s office said in a statement.

The Distilled Spirits Council, an industry group, slammed the Trump administration’s move, saying the U.S. government has dragged the hospitality industry into an unrelated trade dispute.

“We are extremely disappointed that the U.S. has announced it will impose more tariffs on additional categories of imports of EU distilled spirits in connection with the civil aircraft subsidy disputes, including certain Cognacs and other non-grape brandies,” the group said. “Hospitality businesses and our consumers, as well as producers, wholesalers and importers of distilled spirits are collateral damage in a dispute wholly unrelated to the drinks business.”

While President Trump has been aggressive in using tariffs as a major tool in his trade policy, the dispute in question has spanned multiple administrations.

President-elect Joe Biden has signaled he would not immediately remove Trump’s more controversial tariffs on China, but it’s unclear whether he would change tariffs on the EU.