In the face of US sanctions, the EU says it has "no choice" but retaliation

The increase in customs duties against European products is worth 6.7 billion euros. In France, the wine industry is worried about its first foreign market.

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European Commissioner for Trade Cecilia Malmström in Geneva on 14 June.
European Commissioner for Trade Cecilia Malmström in Geneva on 14 June. Denis Balibouse / REUTERS

The hour of the riposte has come. The entry into force on Friday, October 18th, at 00:01, Washington time, of American customs sanctions with regard to the European products provoked a first volley of irritated reactions. " Regretting " EU Trade Commissioner Cecilia Malmström said on Friday that the European Union (EU) has not "No other choice" that retaliation.

Read the platform: Cecilia Malmström: "EU exports outside Europe represent 36 million jobs in Europe, including nearly 3 million in France"

This increase in US tariffs on European products worth $ 7.5 billion (€ 6.7 billion) received the green light from the World Trade Organization (WTO) in part of the series of grants awarded to Airbus. The next episode of this twists and turns should be the possibility that will be given in 2020 by the WTO to the EU to in turn impose sanctions against the United States, accused of having subsidized Boeing.

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The wine industry worries

For France, according to credit insurer Euler Hermes, the cost of US sanctions should amount to one billion euros. More than half of the bill (530 million euros) will be borne by the aviation industry whose sales of finished aircraft will be taxed at 10%. Exports of non-sparkling grape wines, penalized by customs duties of 25%, would be affected to the tune of 370 million euros. The rest could be levied on dairy products (60 million euros of losses) and other residual items (40 million).

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Particularly worried, the French alcohol exporters on Friday asked the government for quick support measures for the wine sector, and the European Commission for opening negotiations with Washington. Monday, October 14, the president of the department of Côte-d'Or had even played the humor and taste of Donald Trump for social networks to try to change his mind.

Announcing that he was going to send two bottles of burgundy to the American president, François Sauvadet (UDI) had tweeted: "Too bad, Mister President, to penalize the American people by inconsiderately taxing our wines. Once you have tasted them you will come back on your decision. "

The US tax on French wines should lead to higher prices for the American consumer. An increase in the price that leads to a significant risk of loss of market share.

"The United States is our largest customer and accounts for nearly 20% of all our wine exports", says in his statement in a statement the Federation of Exporters of Wines and Spirits. The latter adds that more than 4,500 French wine exporting companies are now directly impacted by the decision of the US administration. Earlier this week, the French agriculture minister seemed to want to send the ball back to Brussels. Didier Guillaume asked the European Commission to "Take accompanying measures to deal with this exceptional situation".

Friday, before going to a meeting with Robert Lighthizer, the US Trade Representative and chief negotiator for the United States, the French Minister of Economy, Bruno Le Maire, denounced a "Aggressive gesture" from "American allies" and qualified "Deeply unfair" the sanctions that affect French wine.


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