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Threatened tariff on European wines worries Vermont food industry

January 22, 2020
In The News

WINOOSKI — Rep. Peter Welch called on the Trump administration to abandon plans for tariffs on European wines, which Welch and members of the Vermont food and wine business community said would drastically hurt their businesses and the state. 

Welch held a press conference at the Beverage Warehouse in Winooski Wednesday with people who work in the Vermont food and beverage industry and expressed concern about the proposed tariffs. 

The Trump administration threatened late last year to impose a 100% tariff on all wines imported from the European Union, a move that could double the market price of European wines in the United States. The Trump administration already imposed a 25% tariff on certain European products, including French wines, in October 2019.

Jason Zuliani, the owner of Dedalus, a wine shop in Burlington and Middlebury, said that the tariff would affect his 25 employees and other workers connected to the wine industry, from truck drivers and warehouse workers to sales people.  

“I think it’s important to understand that these are punitive measures, but they’re not going to have their intended consequences,” Zuliani said. “They’re going to impact your friends, your neighbors and your community in a way that could be irreparable.” 

Trump and French President Emmanuel Macron apparently reached an agreement Tuesday to hold off on escalating the tariff battle for now. Concerns remain, but Welch said he is more optimistic now than he had been in recent weeks because the industry has rallied opposition to the tariffs. 

“The wine, spirits and food industries have become an essential part of our economy,” Welch said. “But it’s really been an essential part of our effort to try to renew a sense of community where we live, and that is so important.” 

 Leslie McCrorey Wells is the co-owner of three Italian restaurants in Burlington, Pizzeria Verità, Trattoria Delia and Sotto Enoteca. She said an increase in the tariff would harm her business. 

“Trump’s proposed 100% tariffs have created an unstable, stressful and uncertain time for owners and employees alike,” she said. 

McCrorey Wells said that Italian wine sales represent more than a quarter of the total sales at Trattoria Delia and Sotto Enoteca. 

“Because our margins are terribly thin … much if not all of our increased wine costs will be shifted to our consumers, which will likely result in a reduction in sales, possible layoffs and terminations, and maybe even the end of our business model,” she said. 

The Trump administration is considering raising the tariff in response to EU subsidies given to European company Airbus and in response to a tax on tech companies. 

Welch said that the dispute over the tax on major technology companies like Google and Facebook should not lead to a tariff that would negatively affect those who work in the wine and food business in Vermont. 

“In my view, Google and Facebook can handle this, they can take care of themselves,” he said. “These [Vermont] enterprises that are all represented, are literally being held hostage over something that is not anything that they caused.” 

Matt Farkas, assistant beer/wine director at the Beverage Warehouse, said the state has made a global impact in farming, beer, wine and hospitality. 

“I think Vermont is tied to the service industry, and I think with this tariff, we will be essentially stunted as our growth to compete with bigger markets,” he said.  

 Krista Scruggs, the founder, owner, farmer and winemaker of ZAFA Wines, said that the effect of the tariffs on distributors would impact her business. Tariffs on EU wine would not be a boost for small American producers like herself, she said.  

“As restaurants and retailers lose revenue and close stores, so will distributors, warehouse workers, truck drivers and small American producers and grape growers like me,” she said. “We are an ecosystem, and a huge issue disruption such as these tariffs will leave no one escape.”

Vermont Sens. Patrick Leahy and Bernie Sanders joined Welch in writing a letter to U.S. Trade Representative Robert Lighthizer, which stated the tariffs would cause economic harm to consumers, wineries, exporters, importers, retailers and restaurants in the state. 

“Further escalations of these disputes will jeopardize small and medium sized businesses and the middle-class Vermont jobs they support,” the delegation wrote. “The Vermont wine community, from grape to glass, represents the best of what Vermont has to offer.”