Ep. 481 wine2wine Session Recordings | The Future of American Tariffs

Italian wine podcast. Chinchin with Italian wine people. Italian wine podcast as wine to wine twenty twenty media partner is proud to present a series of sessions chosen to highlight key themes and ideas and recorded during the two day event held on November twenty third and twenty fourth twenty twenty. Wine to Wine twenty twenty represented the first ever fully digital edition of the business to business form. Visit wine to wine dot net, and make sure to attend future editions of wine to wine business form. Hello. Hello, everybody. Welcome. Welcome to wine to wine. This is our seventh edition, a very different edition at that. The session you're about to follow is the future of American tariffs. A trump phenomenon of here to stay with Carmen Skernick and Mark for Natalia. So, you know, as we all know America is the most important market for Italian minds, This topic is of interest to many. I was hoping that, you know, with the new presidency, this would we would be in a better place. I just read an article recently. It said new president will end wine tariff. So we'll see what Carmen and mock has to tell us. This all happened because very recently whilst I was I was I was I was I was I was navigating. I ran in China in China website from USDA which stands for United States, wine trade alliance. It's a lobbying group of American importers, wholesalers, restaurant operators, and retailers. And its mission is to eliminate awful tariffs. Isn't that a great thing on imported wines and spirits? I saw Harmon Skurnix, as one of the advisory board member, of this organization, and I said to myself, who better than, Carmen, who can decipher the latest trade disputes and ongoing negotiations between the United States and the EU. So today, he will be wearing two hats as the president of historic Skarnig wines, an importer and distributor of fine wines and spirits of thirty three years, a portfolio of five hundred wineries and distilleries worldwide. As well as the representative of USDA. Mom, on the other hand, it's his colleague, Mark Fernandezale. I understand he's fluent in Italian, so marks that I wanted to let you know. He has been with Scernic for the past sixteen years, and he's the main squeeze. The the principle when it comes to Italian wine portfolio that. He the thing I really liked about Mark, I don't know him very well, but I've read on his CV that he played a key role in expanding Scernick's selection of Italian wine producers as well as spearheading growth spearheading growth for the company markets relatively new to Skernick as a distributor, namely Ohio, Kentucky. Indiana, and California, which is terribly interesting for us because as Italian wine promotion, organization, we often go to, of course, you know, California and New York, Florida. But I think, maybe mock has some insights, especially in two of these. Also, they're relatively unknown, uncharted, territories for Italian wise. Take it away, Amit, and Mark. Hey. Good morning, everybody. Good morning. Just wanted to echo some of the things that, Steve, thank you for that beautiful instruction, but, give you a little more story about what I do as Italian portfolio manager and what Scernick does, you'll get a bit of background and history here. But, first and foremost, you know, the wine businesses faced many crises over the past thirty years. And as we're here today to talk about tariffs, I'd just like to tell you that in this business, there is no mind more capable of tackling our problems, either foreseen or unforeseen than the man that I'm going to introduce you, Martin Scernick, the residence of Scrant wines and spirits. Scronic wines was founded in nineteen eighty seven with a small number of six American wineries. And today, as T. V. Said, we represent over five hundred producers worldwide. We employ one hundred and eighty people across the United States, and we are an importer distributor in eight states, including our home markets of New York, New Jersey, Pennsylvania, Connecticut, but also California, Ohio Kentucky and in Vienna. Carmen with his brother, Michael, have been importing and selling Italian wines in the United States for over thirty years. We exclusively represent over a hundred Italian producers from Altawati Jay to Valle Dosta, to Sicily. Chíman Casolo Imoguise. We are particularly strong in both Piedmont and Tuscany where we have seen interest in the killer bees, Barolo, Barbara, and Bernelo of Sore in the past twenty years, especially. I started at Scernic in two thousand and four as the Italian portfolio manager when we would consolidate the container of Italian wine at LaVourno maybe two or three times. This year as strange as it might be. We have just closed our one hundred and twelve Italian container last week. In sixteen years at Scvernick, I've seen the US market expand with great appetite for Italian wines. These days, in particular, very focused on seeking out the beautiful tradition in Italy of protecting designated abilations and preserving indigenous varieties. There is an unslakable thirst for Italian wine in the United States, but not just Americans love your stories your traditions, your mountains, hills, valleys, and coastlines. And every battle that we spell hints at these natural wonders of Italy, which in our opinion will continue to fasten the American consumer for many years to come. My job for Skernick in so many words is about communication. As the Italian portfolio manager, I must tell the stories of our states in the most compelling way in order to convince our sales representatives and their clients of the value of our selections. I work with our producers to hone these stories, and I help tweak their marketing and PR for our audience. I manage the inventory, pricing, profitability, I create initiatives and sales campaigns in order to further our goals of selling the most Italian wine possible, and I follow in a weak group top clients in the United States to make sure that we are meeting their Italian needs. Any question from an Italian producer about the US market that's earning is directed to me. And the same for any questions the sales rep or client may have about it. Wine first, but often it's about culture, food, and travel. As I close in on my twentieth year in the wine business, there's one small piece of advice I can offer for the marketing sample. Though it is inside for today's intriguing discussion about tariffs. As producers, you must tell your stories to as many people as will listen. And one of the easiest ways to do this is Instagram. For tips on how, I recommend you follow us on social media. I am fornarino. Carmen is h Scerdick, and we are Skrdick White. Without further ado, I present it to you, Harman's failure, not only the president of Scernick Rathouse, but also a founding member of the US wine trade alliance whose sole mission is to eliminate tariffs on wine and spirits from the European. Thank you, Mark, and, welcome everybody. Appreciate that great introduction. Very comprehensive. And, you know, really, Mark, without Mark, we would be a different company. He is, truly the best at what he does. Yes. Let's get into it. In addition to running our company, Skernick Wines and spirits, I was a founding member of the US wine trade alliance, which, as Stevie mentioned, our sole mission is to eliminate tariffs. From the EU to the United States. In thirty two out of our thirty three years in business, there was no such thing as tariffs as far as we were concerned. There was not even a thought about it. America was known as the land of free trade. Tariffs were protectionist measures that other countries did, not the United States. Of course, in twenty sixteen, we elected a new president, mister Trump, and he entered the scene. And part of his campaign was he actually called himself, quote, unquote, Tarriff man. He said trade wars are easy to win. And of course, his America first campaign, has been now repudiated, and as we've are electing a new president, we might be looking forward to some changes. But at the time, he was mister tariff man, and he gave our United States trade representative, Mr. Lighthizer, czar Power, almost unlimited powers to tariff without congressional approval. And tariff, he did. First, they went after China. And then in October of twenty nineteen, there was the famous ruling by the World Health or by the WTO rather the World Trade Organization. After a fifteen year litigation between Airbus and Boeing, they determined that Airbus had illegally subsidized the business. And therefore, They ruled that the United States could legally tariff up to seven and a half billion dollars a year in European Union goods. That was a record award by the WTO at the time, and still is, actually. So, mister tariffman, in October of twenty nineteen, imposed tariffs on a whole host of EU products. As you well know, including still wine, mostly still wine under fourteen percent alcohol from France, Spain, Germany, and the UK. Plus, of course, Irish and Scotch whiskey, and then liqueurs and cordials from Italy, like amaro, for example. They mainly went after countries that are part of the Airbus consortium. So Italy was mostly spared. Thankfully, because our sales of Italian wines, this year have actually increased which is not the case for the tariff countries. Since October of nineteen, wine importers in the United States have paid over two hundred and fifty million dollars in tariffs to the US government on wines. Our company alone has paid more than two million dollars. This has definitely had a significant impact on our sales. We've had to raise prices as a result, and therefore sales have dropped. Add to that the problems of a worldwide pandemic, and it was pretty much a total disaster. Now, just last month, The WTO went and gave the EU an award similarly on this same dispute, judging that the United States gave illegal subsidies to Boeing. And allow them to now tariff the United States products to the tune of four billion dollars per year. Unfortunately, they didn't wait. The EU is not waiting until the new administration comes in which would be my suggestion to them. Because they've announced already that they're going to place tariffs on American products now. And with the Trump administration still in power, they could turn around and retaliate, before January twentieth when Biden gets inaugurated. And that would be most unfortunate, and they could start including countries that were left off the last time. And we just don't know what they'll do. And again, they don't need congressional approval for that. So as Stevie mentioned, and thank you for your introductions Stevie as well. We did, as a result of all, this create a very powerful now trade organization called the US wine trade alliance, which has over six thousand members across the United States. All fifty states are represented with importers, retailers, and restaurateurs, and the singular mission is to eliminate all tariffs. We lobby US lawmakers. We create PR campaigns. We've created, during the time that, these tariffs were threatened. We had lots of newspaper articles written. We've, you know, flooded the airwaves with, public relations. And we were very successful, actually. At least we haven't that the tariffs haven't gone up. We've kept them where they are. Now on top of the Airbus Boeing dispute, there's another dispute and a new challenge as well. And that's the digital services tax dispute. As many of you know, many EU countries, including Italy are threatening to tax digital companies who are conducting business in the EU. These are companies like Google, Facebook, Amazon, and Apple. In fact, it's called in the United States, the Gap attacks. The u the US trade organization, the US trade representative, rather, calls this tax discriminatory against US companies because, of course, those four companies are all American companies. And back in December of last year, the US threatened to impose tariffs on France at the time because France had announced unilaterally that they were going to impose this digital services tax. And the USDA threatened up to one hundred percent tariffs on luxury products from France like Champagne. At that time, the US WTAR trade organization went down to Washington DC, and we actually testified in front of Congress We had over fifty different testimonies. And we were heard. As a result, wine was actually left off of the list of tariff products from France, and that was really our doing. Now the EU is very impatient, because the EU wanted to negotiate this digital services tax across the entire EU through the OECD. The organization of economic cooperation development, but the US seems to be stalling. And it's very frustrating. So EU member countries are losing patience and they're starting to impose these taxes unilaterally, including Italy and Austria. And of course, when they do so, the US threatens to retaliate. Now on top of all this, as I mentioned before, we have the pandemic and the economic crisis. Restaurants are shut down in the meantime fighting for their lives. Importors in the US can only sell retail for the most part, and sales are down. The economy is suffering. Our newest initiative as we head into a new administration is to try to influence the Biden Administration, and where our new strategy is to to recruit restaurant owners because they are suffering so much in as part of our effort to include wine. There is tariffs on wine, and there are tariffs on all sorts of European products like olive oil, for example, And we are arguing to the new administration that these this industry needs relief. So we're calling a tariff relief. And I guess, you know, the main question here in the in the topic of this entire session, really, is does trump's defeat mean the end of tariffs? And unfortunately, while there's hope, that's not necessarily the case, Biden does represent a positive return to normal and away from nationalism. He he has stated his goal is to reestablish the relationship and partnership with our European allies which, of course, we welcome. We are allies. We have been for many decades, and it's really important that we return there. So our new US WTA strategy is to influence the Biden transition team, which is undergoing their transition right now, but it won't be easy. And the reason why it won't just go away under a new administration is that there are actually plenty of Democrats who who is the party of Biden that believe in protectionism too. Many of these digital companies, for example, Google, Facebook, Apple, Amazon, they're headquartered in Democratic States. Many influential Democratic Senate and house members, including speaker of the House Nancy Pelosi, are in California. And these companies are major donors to the Democratic Party. So if the EU implements digital services taxes, it will be difficult even for a Biden administration to sit by and do nothing. So we are as we mentioned before, we have a singular mission to eliminate these tariffs. We're gonna do everything we can, and we have made a lot of progress. But it's gonna be take some time. It, it'll be several months before there is even a a new US trade representative appointed. So we think that we have about six months before we see any real progress, but we hope within the next year to really see, if not an elimination of of the tariffs, hopefully a decrease. We remain hopeful and we're fighting hard. And the best thing is that we have universal support in our industry from restaurant tours to retailers to import as we all are single-minded and we're working really hard to make this happen. And now I think if there are any questions, Mark, on there, well, having to take some questions to answer. No questions have, have yet popped up, but we definitely welcome them through the chat on the on the live discussion. Maybe perhaps if anything came to your mind while you were listening, you can ask the questions on their behalf, if you think of anything. No. I I think it's, I I think it's predicting that we have such a large contingency of restaurateurs, wine producers, even American wine producers, really, that are against against these tariffs, and and I and I really hope that that, that shows something in the in the near future. But unfortunately, right now, we're in this sort of no man's land, the Trump administration is is winding down and, Biden's administration won't begin until January twentieth. And in the meanwhile, it seems to me that, the truck strategy is to impose as much harm possible, to the economy and then to, states that, that voted against him in the election. So if the majority of wine fans are in California and New York and, Illinois, then truck will try to find a way to, to set our, part of our celebration victory. Yes. Well, you know, we certainly, I think you know how I feel. We there's no law of loss there. And we, we look forward to the new administration. We are hopeful. As a result, we're very happy that that that has taken place because, we think there's a chance for our industry to return to normal, which would mean no tariffs in the future. It just may take some time. But I do think since you did mention restaurants, you know, we they are really, really struggling, and tariffs tariffs are only a small part of what they're struggling with, and we, do express so much empathy for what they're going through. It's an existential fight, and so many restaurants have gone out of business. And think about it, you know, if if we're talking about Italian wine, for example, I mean, America has so many Italian restaurants, and that is such a great avenue for us to to express these wonderful, wonderful wines from Italy. And if if half of them go out of business, it's just it's a tragedy. So, you know, they have other problems besides tariffs. We're gonna do what we've told the restaurant industry is that we will do all of the work. We just want you to join in in in this fight. And, they've agreed to do it. We've got some actually, we've got some very prominent names, in the restaurant industry who've agreed to be a face to this campaign. And, it's we we expect it to be very effective. Carmen, we've got a great question from, Jenny Burgess and in California. She's asking if, we have any thoughts on how some of the as an industry members can help at a grassroots level to make the positive changes, as we transition into the biden administration. That is a very good question. I would say the first thing you can do is, go to our Facebook page, which is the US wine trade alliance pay Facebook page, and, become a member. There's a lot of information there. There are letter writing campaigns that we do throughout the year. Whenever these tariffs are being threatened, And they've resulted in tremendous successes. These letter writing campaigns to Congress men and women, and senators, have resulted in them writing letters to the US trade representative And that's why the US trade representative thinks of the wine industry is a real thorn in their side because we've been so effective in communicating to them how much this is hurting American industry. And so, all of these campaigns, you can take part in, but I the best place to get all that information is to go to that Facebook page, US wine trade alliance. And, posting a link to that right now on behalf of which I couldn't believe you were. Oh, great. Are there any other questions? Anyway, I look forward to doing this in person perhaps next year. We, Mark and I, we go to the the Italy conference in April every year. And, you know, doing this virtually is fine for for now, but, there's nothing like seeing everybody live. And we we look forward to doing that in the future. Absolutely. We missed a run up twenty twenty, and and hopefully we'll we'll be able to get back for twenty twenty one. Alright. So I guess, if there's no other questions, we can, we can wrap things up. Any final thoughts? Mark. I don't know. Just, keep on doing what you guys are doing. I know it's a very difficult time in in Italy right now. Not made any easier by these tariffs, but as I mentioned, the the passion that I see And, the end consumer for Italian wines is an enemy. And you guys just keep keep making the beautiful wines and keep working as far as I can. When you were on on how the tartufi season is this year? You could use some at this time. Correct? They they they shouldn't. They should be arriving. They should be arriving soon on on our shows. We're seeing a couple of offers, here in that's, no no word on quality just yet. I look forward to opening some older borollos soon. Alright. Well, it's, been nice to see everybody, even though I can't see you. And thanks for participating in this, this event. If you have any further questions, I can be reached by email, at h s at skernick dot com. If you if you come up with any questions, because I know this will play after the conference is over as well. And if you have a question about the tariff situation, or about our company, just feel free to to email me. H s at skernick dot com. That's s k u r n I k. Thanks. Listen to the Italian wine podcast, wherever you get your podcasts. We're on SoundCloud, Apple Podcasts, HimalIFM, and more. Don't forget to subscribe and rate the show. If you enjoy listening, please consider donating through Italian Wine podcast dot com. Any amount helps cover equipment, production, and publication costs. Until next time.