Winery owner says tariffs could force her out of business

There has been considerable confusion regarding tariffs on European goods in recent weeks, in part due to headlines earlier this month that a different potential 100 percent tariff that targeted French wines and luxury goods to punish France for imposing a digital services tax on American technology companies had been postponed.

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But that tariff threat is unrelated to the proposed 100 percent tariff on a broad range of European goods, which is in retaliation for a decades-long airline industry dispute. Those proposed tariffs have not been postponed or called off in any way, according to Palomar and other organizations that are opposing the move, including the North American Olive Oil Association.

That proposed retaliatory action proposed by the Trump administration that would affect a broader array of European goods threatens the existence of hundreds of American businesses and the livelihood of thousands of employees of American companies, according to written comments submitted to the U.S. Trade Representative’s office. As of Feb. 6, the office had received more than 25,000 comments on the proposed action.

There already is a 25 percent percent tariff on many wines, olive oils and other European goods that went into effect in 2019 in retaliation for Europe’s continuing subsidy of its large-aircraft producer, Airbus, which the U.S. Trade Representative’s Office has said violates long-standing World Trade Organization agreements. The trade Representative’s office has proposed ratcheting up the pressure with an additional tariff of up to 100 percent on hundreds of European products, including wines and olive oils, to take effect as early as mid-February.

In Ohio, because of a three-tier distribution system that required minimum markups from producer to distributor and from distributor to retailer, the impact of a 100 percent tariff at the time of import would raise the retail prices of European wines by 150 percent, Palomar and other Dayton-area wine importers have said.

“I can’t afford to bring our wines into the country,” Palomar said. “One-hundred percent of the burden of that tariff hits me. I don’t have the funds to handle that.”

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Palomar’s late husband, Dr. Juan Palomar, was a urologist and surgeon who practiced in Dayton and Southwest Ohio. In 2002, Dr. Palomar planted vineyards and founded Dominio Buenavista, which produces wines under the Veleta label, along with olive oil, sherry, canned tuna, sardines and other specialty foods from an estate overlooking the village of Ugijar, his boyhood home, 30 miles from the Mediterranean Sea. The physician died of brain cancer in June 2018, at age 69. Nola Palomar is overseeing the company and raising the couple’s 16-year-old daughter, Nolita.

“I feel like I don’t have the power to save my own business,” Nola Palomar said. “My daughter is getting ready to go to college in a year and a half. How can I help her if I can’t save my business? It breaks my heart.”

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The 25 percent tariff on olive oil and other European goods in October 2019 drove down sales of olive oil in the U.S. by 8 percent in December as companies canceled or scaled back promotions to try to keep olive oil prices affordable for American consumers, the North American Olive Oil Association said in a release.

As consumers switch to other, less heart-healthy oils, the tariffs will have an adverse impact on Americans’ health, association officials said.

American olive-oil producers cannot fill the void. The U.S. is the third-largest consumer of olive oil in the world, but it produces only 0.3 percent of the global supply, the association said. European Union countries account for about three-quarters of global olive oil production, the association said.

With the public-commenting window closed, Palomar and others who would be impacted by the additional tariffs said they are simply waiting for the final decision by the U.S. Trade Representative’s office.