At this moment we are confronted by a strange and serious threat to the food and beverage industry.
For 30 years I have made my living as a restaurant chef, the past 20 here in Charleston. I have seen the food and beverage industry fundamentally change the face of our beloved city, evolving from a sleepy Southern coastal college town to an internationally recognized destination with a booming tourism economy. There is a deep network of entrepreneurs, growers, chefs and suppliers that have contributed to this success story.
Right now, their livelihood is imperiled by the proposed 100% tariffs on wines and other specialty goods imported from the European Union. This stems from a decades-old Airbus subsidies dispute but would prove devastating to many American-owned businesses, especially restaurants.
Without a doubt, all restaurants will lose profit with the imposition of tariffs on wine. In an industry known for high risk and small margins, this is particularly treacherous. Worse still, wine is a finite product. You simply cannot make more without large investments in time and capital. Once new trade routes for these products are established, they will be very difficult to bring back, breaking an accepted tenet of wise tariffing: Don’t cause long-term damage for short-term action. So all you Cognac connoisseurs, Sancerre lovers, Burgundy enthusiasts, Prosecco fans, be warned: When these go away, they may never come back.
Perhaps the tariffs would be worth this danger if they had a desired effect on our trade adversaries. In October, 25% tariffs were imposed on French wine and in November, U.S. imports from France fell 48% — but virtually all of those lost imports were transferred directly to China, whose imports of French wine grew 35%. Despite the huge drop in its exports to the U.S., France actually exported more wine during the month after the tariffs, showing just how ineffective tariffs can be.
If 100% tariffs are imposed, say goodbye to affordable, delicious wines by the glass. A sensible remedy is for us to buy more American wine, and we will surely continue to do so. However, the domestic wine industry lacks the value and diversity of the EU, where land, wineries, and know-how have been passed down for many generations. There is simply no better source of high-quality, value-priced wine anywhere in the world.
The tariffs also threaten to become a penalty uniquely aimed at the restaurant industry because they also could affect imports of olive oil, gourmet cheeses, pasta, whiskies, coffee, flatware, stemware, enameled cast iron and fine linens. Although we source a large portion of our goods domestically, we are just one of many restaurants that contribute to the food and beverage economy.
We are proud of the many FIG and The Ordinary alumni who have gone to the edges of once-marginal, now-revered neighborhoods to open restaurants and spark development. The proposed wine tariffs would put a halt to the dreams of such intrepid entrepreneurs.
As a concerned small business owner, a friend of family-run wine businesses, an employer of more than 100 Charleston residents, please help me petition our lawmakers and stop this.
The proposed tariffs on wine and specialty goods from the EU are inefficient, ineffective and disproportionately harm American businesses. We must encourage U.S. Sens. Lindsey Graham and Tim Scott to contact the United States Trade Representative and the highest levels of the administration and persuade them to remove wine and other specialty goods from the trade retaliation list. The penalty to the restaurant industry is unrelated and unfair, and the livelihood of too many is at stake.
Mike Lata is the chef/co-owner of two Charleston restaurants, FIG and The Ordinary.