With the spread of coronavirus, the United States is facing a tremendous health crisis. While the foremost concern for all of us is the well-being of our friends and neighbors, the economic crisis facing American businesses is almost as daunting. Millions of Americans live paycheck to paycheck, and their economic uncertainty and anxiety cannot be underestimated. The pandemic and its economic effects will be especially devastating for every restaurant owner, server, bartender, and food service worker in America.
In October of 2019, the United States Trade Representative and the Trump administration levied tariffs on more than 120 food and beverage products from the European Union that are critical to the profitability of American restaurants. These tariffs are most easily described as a restaurant tax. They were designed to be temporary, but their current implementation and the continued threat of them expanding is adding an undue burden on an industry that is in for a long and expensive struggle.
No industry in the United States is more vulnerable to job loss during this crisis than the hospitality industry. Bringing people together is our passion, and the pandemic strikes at the heart of what we do. There are more than 15 million Americans working in the restaurant industry. Nine out of ten restaurants in the U.S. are small businesses with fewer than 50 employees. The U.S. government should provide robust support for the hospitality industry, and one fast-acting remedy would be suspending all hospitality tariffs imposed by the United States, especially those on wine and spirits. These tariffs are a direct tax on the most vulnerable industries affected by this crisis, and their suspension will provide critical financial relief in these challenging times.
Council of Foreign Relations Senior Fellow and Harvard economics professor Kenneth Rogoff provides this assessment in the Guardian: “Policymakers need to recognize that, besides interest rate cuts and fiscal stimulus, the huge shock to global supply chains also needs to be addressed. The most immediate relief could come from the U.S. sharply scaling back its trade-war tariffs... A global recession is a time for cooperation, not isolation.” Dr. Rogoff suggests a two-year suspension of all such tariffs.
Trade disputes are always complex issues, but one thing is clear: Trade wars are better fought when the global economy is strong. With an economic crisis facing and the hospitality industry in the U.S., these tariffs should be suspended immediately for at least the next year.
If you value the experience that restaurants add to your life, I encourage you to call your representatives in Washington, D.C. and ask them to tell the administration that now is not the time to impose these tariffs on an industry that is so vital to the country.
Harry Root is the president of Grassroots Wine, a distributor in Alabama and South Carolina.