President Trump could announce billions in tariffs this week on European cheeses, pastas, olives, wine and more. That means American producers get a fresh chance to champion the virtues of their domestic alternatives.
Call them the charcuterie tariffs. This week, American importers, distributors, retailers, and restaurants are preparing for the Office of the United States Trade Representative (USTR) to announce a new round of duties on a staggering variety of European foods, from scotch whisky and French wine to Italian meats and cheeses. The tariffs could go as high as 100 percent, which trade experts say is unprecedented in this recent age of intensive trade spats.
Even if those sky-high duties don’t materialize, American gourmet foods companies are bracing for another outcome—a “carousel” of tariffs that rotate every six months, with new rates and goods subject to higher prices with each turn. That climate of uncertainty would be devastating in its own way, the companies say, making it impossible to plan for the future. But it could also foretell a boon for American producers, who may benefit from a sudden dearth of premium meats, cheeses, wines, and oils left by their European counterparts.
So how did we get here? These tariffs are the result of an ongoing, decade-plus feud between the United States and the European Union over support for rival airplane manufacturers Boeing and Airbus. And, yes, this story is still very much about food and drink.
American businesses that built their brands around European specialities have taken to op-ed pages and even Instagram in protest, saying the tariffs could be cataclysmic.
In October, the World Trade Organization (WTO) found that the E.U. had unfairly subsidized Airbus, and granted the U.S. the right to impose duties on $7.5 billion worth of European goods in return. Days after, USTR announced 10-percent tariffs on European-made aircraft, as well as 25-percent tariffs on over 150 product groups, including French wine, Italian cheese; single-malt scotch; various fruits and vegetables; meats and seafood; butter and yogurt. (Those tariffs are separate from the 100-percent levy on cheese and champagne that President Trump threatened in response to a French tax on American tech companies.)
That wasn’t the end. In December, the WTO rejected the E.U.’s claim that it had halted subsidies to Airbus. In response, USTR announced it would raise rates and slap tariffs on even more items, unveiling the expanded list of products that this week could be subject to 100-percent duties—wines, cheeses, meats, pastas, olive oils, and specialty foods from across the European continent, as well as seemingly unrelated items like helicopters, handbags, carpets, and ceramics.
The trade office has since received thousands of comments in opposition to the tariffs. American businesses that have built their brands around European specialities have taken to op-ed pages and even Instagram in protest, saying they could be cataclysmic. They now await a decision from Robert Lighthizer, the U.S. Trade Representative, who is expected to announce the items that made the cut, and the new rates, as soon as Friday.
A 100-percent tariff on parmigiano reggiano, for instance, would bring the per-pound price from $15.99 or $19.99 closer to $35 or $40.
Some argue that European farmers and producers and American gourmands shouldn’t be swept up in a retaliatory battle over aircraft subsidies. But their inclusion in these wide-ranging tariffs is highly strategic, says Derek Scissors, a trade expert at the American Enterprise Institute. In carousel tariffs, sparring trade partners cycle through industries, hoping to find the pressure point that’ll put an end to the bad behavior.
“We’re going to try to poke [Europe] in all the places where they’re sensitive, just like the Chinese did with soybeans,” he says. “We’re going to experiment until we get the thing you dislike the most.”
But that method, dubbed “torture by tariff” by The Economist, would create chaos for American importers and distributors like Ambriola, the New Jersey-based arm of Italian cheesemaker Aurrichio. Phil Marfuggi, the company’s president, says Ambriola normally pays 15-percent tariffs on provolone, parmigiano reggiano, and pecorino romano cheeses, which it factors into its price agreements with grocery stores and restaurant distributors.
Before the October tariffs sent the rate up to 40 percent, Marfuggi upped his orders and stockpiled cheeses in his warehouse. But supplies are dwindling, and more tariffs will only increase the pressure he feels. A 100-percent tariff on parmigiano reggiano, for instance, would bring the per-pound retail price from $15.99 or $19.99 closer to $35 or $40, making his signature product impossible to sell. At that rate, his customers are also likely to stop ordering soft cheeses, like Italian taleggio and French brie and camembert, and the cherished rounds could disappear from retail cheese cases by April.
“You can have a sparkling wine that comes in from Napa Valley, but it isn’t champagne, and consumers know that.”
Into that gap could step American dairy producers. If the price of parmigiano reggiano doubles, Marfuggi predicts that American parmesan will be more readily available in supermarkets. And, he says, the price could rise, from around $5 to $7 a pound, which still makes it a more affordable alternative than imports. He also envisions a boom for domestic French-style brie and Greek-style feta, as well as pecorino romano that’s made from cow’s milk. (Normally, it’s made from sheep’s milk.) The same goes for American-made havarti, which the Danes made famous; a less-creamy blue cheese that could legally be called gorgonzola, as long as it stays in the U.S.; and even a domestic fontina.
This is all good news for American companies like Sartori Cheese, the Plymouth, Wisconsin-based producer of domestic parmesan, fontina, gorgonzola, and a cow’s milk romano, among other hard cheeses. Jeff Schwager, the company’s president, says continued tariffs, even at 25 percent, would boost his business. Besides being more affordable than imported cheeses, he points out that Sartori cheeses have creamier, more buttery flavor profiles, which makes them versatile.
“It’ll compete with any of the European gorgonzolas,” he says of his company’s rich, veiny cheese.
Harmon Skurnik, a wine importer and distributor, is less sanguine. Until the 25-percent tariffs kicked in, he says, he’d never had any tariffs on imported wine in 33 years of doing business. Skurnik says he hasn’t received any new wine from Europe since January, because he’s not willing to risk ordering something that could get hit with a 100-percent tariff while it’s out to sea. As a result, he’s out of stock on “at least” 100 different wines.
“There are certain wines that come from certain places around the world that are unique—champagne from France, or chablis, or barolo from Italy. You cannot replicate them in America,” he says. “You can have a sparkling wine that comes in from Napa Valley, but it isn’t champagne, and consumers know that.”
And while it’s plausible that American vineyards could see a boost if European wines disappear from the market, Skurnik says that American wine producers have his back, because if he’s not financially viable, then they lose their distributor. Until then, all anyone can do is wait.