US – EU provisional tariff suspension signals food industry recovery

EU US Tariff Suspension

After more than a year of trade hostilities between the US and EU, the two parties have finally agreed on March 5 to lift all retaliatory sanctions for a period of four months. Namely, the Biden administration has temporarily suspended tariffs on food, wine and liquor imported from the European Union and the United Kingdom. Most of these tariffs were imposed back in 2019 as part of a dispute between the US and France over governmental subsidies to their respective aircraft industries. Retaliatory tariffs hit American exports of whiskey and certain wines and other beverages.
And while the Biden administration first announced that it would keep the tariffs in place, reversed itself and suspended them following earnest discussions with the opposing side and after seriously considering the damaging effect of the tariffs on the country’s export companies that were cutting into already thin profit margins.
The olive oil and alcoholic beverage industries of both parties were lethally harmed from the import tariffs, resulting in millions of dollars of losses. The suspension of import tariffs was met with optimistic outlooks from the F&B industry players who are hoping that this is the start of a full recovery from damages caused by both the trade war and Covid-19.
EU Commission chief Ursula von der Leyen called it “a very positive signal for our economic cooperation in the years to come.”