US to pay big price for proposed U.S. consumers, companies and workers will pay the biggest price for proposed 100 percent tariffs on French Champagne and other sparkling wines, cheese, porcelain, enamel cookware and handbags, witnesses told the U.S. Government Tuesday.

The U.S. Trade Representative’s office last month proposed punitive duties on US$2.4 billion in imports from France of sparkling wines and other goods after concluding that a new French digital services tax would harm U.S. companies.

Those tariffs would come on top of 25 percent tariffs already imposed on a wide range of European imports, including Airbus jets, European cheeses, wines and other products in a dispute with the European Union over aircraft subsidies. Washington last month said it could raise those tariffs to 100 percent and subject additional EU products to the tariffs unless a settlement was reached.

U.S. President Donald Trump views tariffs as his best tool in disputes with countries and insists they will pay the cost of such duties, but economists say tariffs are borne mainly by importers and ultimately, consumers.

Ben Aneff, managing director of Tribeca Wine Merchants, a retail wine store in New York, said the existing and threatened tariffs posed “the greatest threat to the wine industry since Prohibition,” the U.S. ban on the sale and import of alcoholic beverages that lasted from 1920 to 1933.

“The domino effect of unintended consequences from the proposed tariffs would be catastrophic for tens of thousands of American businesses,” Aneff told U.S. government officials at a hearing on the French tariff issue.

The Wine & Spirits Wholesalers of America estimates that 100 percent tariffs on French sparkling wines alone would trim overall U.S. wine sales by nearly 2 percent, resulting in the loss of 17,000 jobs and a cost to the U.S. economy of US$2 billion.

Wine experts say consumers have strong loyalty to specific products, such as Champagne from France, and will not readily adopt substitutes.

Overall, the tariffs on European wines were expected to cost some US$10 billion in lost revenue and 78,000 job losses, hitting the nation’s 47,000 wine retailers and more than 6,500 importers and distributors hard, Aneff said.

He said his business in downtown Manhattan had survived the 9/11 terror attacks, the 2007-2008 global financial crisis and Hurricane Sandy, but its fate would truly be in jeopardy if the tariffs were put in place. (SD-Agencies)