Trade dispute: How US punitive tariffs hit Italian cheese producers

Who would have thought that Italian Prime Minister Giuseppe Conte would once demand the "maximum attention of the government" for Parmesan cheese? The announced punitive tariffs of the USA on imports from Europe caused in Italy furious indignation. Because the Parmesan is not only a matter of the heart around the region Parma, he is also an export hit.

Because of illegal EU subsidies for the aircraft manufacturer Airbus want the United States from this Friday, a penalty of 25 percent on the cheeses Parmigiano Reggiano and Grana Padano. Italy could hit hard: The USA is the second most important export market for the sale of Parmesan, with around 10,000 tonnes of hard cheese delivered there each year.

Instead of $ 2.15 as before, it is now planned to pay 6 kilos on Kilo Parmesan. Americans would then no longer have to pay $ 40 a kilo, but $ 45. "We are bitter because it unjustifiably hits one of the strongest sectors of our economy," said Nicola Bertinelli, head of the Parmesan consortium.

"The Ferraris of gastronomy"

Besides Parmesan, cooked ham, salami and Campari are also affected. "Our ham and our Parmesan are the gastronomic Ferraris, they are the best in the world, and I'm sure Americans are keen to eat them," said Foreign Minister Luigi Di Maio. Not affected are: Parma ham, buffalo mozzarella, Prosecco, wine and olive oil.

For this, the olive oil from Spain is affected, which concerns especially Andalusia. Of the more than 400 million euros that Spain received for exporting olive oil to the US in 2018, 80 percent went to Andalusia. "I do not know how long many of the affected companies can endure the consequences," said Regional Labor Minister Rocío Blanco. The expected sharp decline in exports to the US will hit many companies hard and raise the unemployment rate, which is already more than 21 percent there.

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But also in Germany there is concern, here the wine is affected. "We assume that the new tariffs will cause a noticeable damage to the wine exporters," says Ernst Büscher of the German Wine Institute. The US is the "wine exporting country number 1". Büscher sees a distortion of competition in the fact that German, French and Spanish wines, but not wine from Italy, Greece or Portugal are affected by the punitive tariffs.

The effects of the punitive tariffs will be felt most strongly in the fierce competition on the retail wine shelves, expects Albrecht Ehses, Managing Director of the Rheinhessen Winery Association. "You can expect price increases of $ 2 to $ 4 per bottle, and then the customer quickly reaches for another wine."

The US punitive tariffs apply to $ 7.5 billion of EU imports. That was the highest amount ever approved in the nearly 25-year history of the World Trade Organization (WTO).