Levy on European Products a Mixed Blessing for California

Some California wine-grape growers may benefit from a 200% levy on selected European Community agricultural products, but other California farmers don’t expect any windfall.

In fact, the state’s rice growers could be hurt indirectly if the Europeans follow through with a threatened new levy on that crop in retaliation for tariffs the Reagan Administration announced Tuesday.

The Administration’s plan to impose high tariffs on European Community wine, brandy, gin, soft cheese and untreated olives is itself an attempt to retaliate against trade barriers on American feed grains.

Cheap Wine Only

The wine tariff will be limited to cheaper wines and exempts “the really good stuff,” U.S. trade representative Clayton Yeutter said.

Thus, California’s premier wine-growing areas along the coast won’t be helped, but growers of Thompson seedless, Columbard and Chenin blanc varieties used in jug wines may gain, said Robert Hartzell, president of the California Assn. of Wine Grape Growers.

“That moderately priced or jug-wine market of California wines has been pretty flat for several years now, so I think those vintners would welcome increased demand for their product,” Hartzell said Wednesday.

Hartzell expressed the hope that U.S. and European trade officials will negotiate some sort of settlement to avoid an escalating trade war.

Working Out Details

“I think the best interests of everybody would be served by both parties getting back to the table and working details out,” Hartzell said.

Ralph Newman of Farmers Rice Cooperative in West Sacramento felt that the President did the right thing, even though his crop could be hit by a retaliatory tariff.

“We support the Administration’s action,” Newman said. “We think it’s long overdue to put some teeth into some of their rhetoric about foreign trade and equality of trade. While we’d be affected, were we to do nothing, I feel we would pay a greater price in the future.”

Most American rice sold to Europe comes from the South, but loss of that market would make southern rice growers compete harder for domestic, Asian and Middle East markets where California growers sell, Newman said.