Article: Lawmakers plead with US Trade Rep to scotch tariffs on EU food and drink

A bipartisan group of US legislators is pleading with US Trade Representative (USTR) Robert Lighthizer to remove retaliatory duties on food and drink imports from the European Union — tariffs tied to a different trade dispute — that they claim would harm their constituents.

In a July 29 letter to Lighthizer, the lawmakers urge a "targeted approach" to meting out sanctions on EU exports because of an ongoing civil aircraft dispute involving aerospace giant Airbus before the World Trade Organization (WTO).

They say USTR must remove duties on food and drink products "as that industry is struggling during the current pandemic."

Reps. Bill Pascrell, Jr. (D-N.J.) and Brad Wenstrup (R-Ohio), plus 164 additional members of the House, are leading the campaign to push USTR to reconsider trade sanctions on a range of EU food and beverages that are otherwise sources of profit for bars, restaurants, and other small businesses.

"Tens of millions of Americans are now out of work and businesses across America have been devastated," Pascrell and Wenstrup write.

"The economic crisis resulting from the COVID-19 pandemic has been particularly hard for the food, beverage, and hospitality industries in our country, which include many small and medium-sized retailers, restaurants, distributors, and manufacturers.

"For instance, many restaurants across the United States have closed their doors or are operating with limited seating capacity due to government mandates," Pascrell and Wenstrup continue. "In this environment, these businesses have minimal flexibility to raise prices. Additional duties on imported wine, spirits, and food products like fruit, pork, and olive oil cut into their already tight profit margins, further threatening the survival of these industries and the many jobs they support."

The civil aircraft dispute stretches back to at least 2011 when WTO first found that EU member states were illegally subsidizing Airbus at the expense of Boeing in the US.

In Dec. 2019, a WTO panel upheld previous findings that EU states had made only cosmetic changes to what USTR considered a "corporate welfare scheme" on behalf of Airbus. WTO opened the door to US tariffs of 10% on large civil aircraft and 25% on agricultural and other products, with the bulk of these tariffs being applied to imports from France, Germany, Spain, and the United Kingdom - the four countries responsible for the illegal subsidies.

In February, WTO announced it planned to go further still identifying an additional $3.1 billion in products - including many ag goods - that could be targeted with higher duties, possibly as high as 100 percent.

And then, of course, the COVID-19 pandemic hit the US where it has been raging ever since.

In a news release, Pascrell said, "Businesses in the food, beverage, and hospitality sectors are especially vulnerable, encompassing many small and medium-sized retailers, restaurants, distributors, and manufacturers which are operating in limited or no capacity. Failure to remove these tariffs could further squeeze countless struggling small businesses and force many to shutter and eliminate jobs."

And while lawmakers praise Lighthizer for his get-tough stance on the EU/Airbus issue, they add, "We hope you will update the United States' approach in this case to eliminate unintended hardships for Americans trying to make ends meet and small businesses seeking to recover."

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.