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EU pledges "riposte" to US threat of Champagne import tariff - report

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The European Union has reportedly threatened to fight back after the US Government included Champagne on a list of French imports facing potential tariffs in retaliation for a tax on American tech firms.

Champagne could reportedly face a US import tax of as much as 100%

Champagne could reportedly face a US import tax of as much as 100%

The list, released yesterday, specified French sparkling wine as a potential target for the tax, which media reports claim could potentially hit US$2.4bn-worth of French products. Most of the products on the list are dairy products such as cheese, but leather handbags and makeup were also included.

Sparkling wine is the only beverage on the list.

The Guardian newspaper quoted the Office of the US Trade Representative (USTR) as saying an investigation found France's new digital services tax was discriminatory against US companies and it may respond with 100% tariffs. US trade representative Robert Lighthizer was quoted by The Guardian as saying the move to consider imposing tariffs "sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on US companies".

According to the BBC, French minister Bruno Le Maire today called the US threat "unacceptable" and that the European Union would "be ready to riposte".

Champagne is the largest segment in the sparkling wine category in the US, according to GlobaData, with a value of US$509.6m in 2018. The segment is twice the size of Cava and 15 times that of Prosecco. In estimations compiled before the tariff threat, Champagne's value in the US is expected to rise to $610m by 2023, an annual increase of about 4%.

When contacted by just-drinks today, a spokesperson for trade association the Comite Champagne declined to comment.

France's digital tax is aimed at preventing tech firms from setting up headquarters in low-tax European countries. The Government has indicated it may impose a 3% annual levy on French revenues generated by companies with global sales exceeding EUR750m ($831.1m) per year and French revenue above EUR25m. 

Europe has been engaged in a long-running spat with the US over subsidies paid to rival airline manufacturers Airbus and Boeing that the World Trade Organization has suggested affected sales. The US hit the trading block with what is effectively an extra tax on European goods worth $21bn in April. In July, the USTR suggested further retaliatory tariffs amounting to around $4bn on EU goods.

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Sectors: Wine

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