A diverse coalition of chefs and restauranteurs are calling on President Joe Biden to end all European food and wine tariffs imposed by outgoing President Donald Trump, a move they say will help the industry recover from the pandemic faster.
Known as The Coalition to Stop Restaurant Tariffs (CSRT), the group includes award-winning US chefs and restaurant owners such as Chris Bianco (Pizzeria Bianco), Thomas Keller (French Laundry), and Alice Waters, who was awarded the National Humanities Medal by President Obama in 2014.
“The pandemic is devastating the American restaurant industry,” Kwame Onwuachi, a James Beard Award-winning chef and former “Top Chef” contestant, said in a statement. “The pandemic has forced restaurants to turn away patrons and lay off longstanding employees. We can’t afford the additional burden of tariffs on imported products and hope to stay in business.”
In 2019, Trump imposed tariffs ranging from 10% to 25% on $7.5 billion of wine and spirits imported from France, Germany, the UK, and Spain. The move was in response to a tariff the European Union placed on aircraft manufactured in the US, thereby putting Airbus and Boeing at a disadvantage.
Over the summer, as an estimated 61% of restaurant closings became permanent, Trump threatened to increase tariffs on another $3.1 billion of cheese imported from these countries.
Food & Wine Magazine found the tariffs created a loophole that increased the amount of high-ABV wine imported into the US. Since wine is taxed according to its ABV and the tariffs only targeted wines up to 14%, Americans were simply being thrifty by purchasing stronger wine, the publication argued.
But, this is exactly what contributed to the decline of local restaurants. While individual consumers got bargain deals on stronger drinks, businesses were left to pick up higher tabs. Lower ABV wines are often less expensive to purchase in bulk, and this economy of scale allows restaurants to serve name brand wines for reasonable prices. Hiking tariffs by 25% on these wines slashed imports on lower ABV wine by $840 million, according to Food & Wine.
To paint the picture, Eric Faber, general manager of wine distributor Cutting Edge Selections, told the Wall Street Journal about a 2019 Bordeaux labeled at 14.02% ABV. Those two decimals mean the bottle can be sold for $153 instead of a much more eye-popping $191.
Ben Aneff, president of the US Wine Trade Alliance, told ABC News that the tariffs are “a shot to the gut for tens of thousands of businesses all across the US—millions when you take restaurants and bars into consideration.”
“These tariffs would cause pricing to rise significantly, and unfortunately could make certain products too expensive for U.S. importers to bring into the country,” he added.
The moves have largely backfired and have since contributed to the crippling of the most diverse sector of the US economy. Independent restaurants have felt the brunt of the impact. According to the Independent Restaurant Coalition, a small business advocacy group, the industry has lost 2.4 million jobs and is experiencing unemployment at 154% of the national average.
However, Trump has since redoubled the efforts, placing an additional 25% tariff on Cognac and Armagnac. These tariffs apply to purchases made before December 31 which have not reached the US yet. This means businesses will receive an unexpectedly high tab if Biden does not act soon.
“Removing these tariffs isn’t about restaurants like Chez Panisse,” Waters said in a statement. “It’s about the thousands of local restaurants that are on the verge of shutting their doors for good.”
On January 17, Biden’s chief of staff, Ron Klain, issued a memo saying the president intends to sign “dozens” of executive orders on his first day in office to reverse many of the ills left by his predecessor. Among these orders are a federal mask mandate on federal property, a new national vaccine distribution system, and providing materials to safely reopen schools.
The memo said Biden also plans to enact another series of executive orders between January 25 and February 1. However, CSRT hopes to be included earlier, to stabilize an industry that is struggling to tread water right now.
“Beloved local restaurants are folding every day,” Bianco said. “A newly inaugurated President Biden could give so many a big boost with the stroke of a pen.”