Trump's other trade war could affect European cheeses and olive oil

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New York (CNN) - The constant flow of customers entering Di Palo's on a recent afternoon was greeted by giant cheese wheels, meat hanging from the ceiling and bottles of olive oil lined up on the shelves, a variety of centuries old that is at risk for the commercial wars of Donald Trump, president of the United States.

Most of the products sold in the 109-year-old specialty store in the Little Italy neighborhood of Manhattan are from the European country and attract customers from all over the world. The store has lasted two world wars and the Great Depression. But due to a fight between the Trump administration and the European Union, Di Palo's customers may soon be paying double the price, testing their loyalty.

The Trump administration has proposed a tariff of up to 100% on 25,000 million dollars in European items. Romano, Parmesan, Provolone and Gouda cheeses are all on the list. But it's not just cheese. It is proposed that tariffs be applied to a variety of items that combine well with cheese, such as wines and meats, olive oil, olives and pasta.

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While Trump's tariffs against China threaten to raise prices for a wide variety of consumer goods, this lesser-known trade dispute has cheese lovers in arms and cheese sellers like Lou Di Palo are worried about how the new potentials Tariffs could affect sales.

Di Palo says that tariffs could reach approximately 95% of the items his store sells, and he is skeptical that customers will pay double for everything. He plans to reduce his profit margins instead of increasing prices to cover the cost of tariffs.

“The products we sell are already quite expensive. For example, Parmigiano Reggiano and Grana Padano. These are cheeses that are sold between 15 and 20 dollars a pound (0.453 g). Could you get between 30 and 40 dollars a pound for this cheese? It's going to be very difficult, ”said Di Palo, who works behind the counter with his brother Sal and his sister Marie in the store that opened his great grandfather.

Auricchio Provolone cheese in the Di Palo's store in New York, United States.

This blow to Di Palo and other importers is that the trade dispute has nothing to do with food. Instead, it is part of a 15-year problem about subsidies for Boeing and Airbus aircraft manufacturers. Both the United States and the European Union have been found guilty, and both threaten tariffs on a wide range of other assets in retaliation. It is up to the World Trade Organization to determine the scope of the allowed rights. A decision is expected sometime this month, and it has importers on the edge of their seats.

Di Palo fears that work carried out at high levels may hinder the survival of his family business.

"Could this be, excuse the expression, the straw that fills the glass and my children and my sister's say that it is no longer worth being here?" He said.

Interior of Di Palo's.

Around 14,000 specialty food retailers, along with another 20,000 food retailers across the country, would be affected by tariffs, according to the Specialty Food Association.

Food importers are also worried. If sales decrease, they will be doing less business.

“100% of tariffs would be really devastating. We are going to make these items so expensive and so unmarketable that we won't import them anymore, ”said Tom Gellert, director of the Gellert Global Group, which owns five food importing companies in the United States and employs more than 500 workers in dozens of state.

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If tariffs are imposed, people like Gellert do not yet know when they will take effect and cannot be sure which items will be applied or at what rate.

“Uncertainty alone is already frustrating. It is very difficult to budget when we do not know what the cost of our products will be, ”he added.

Olive oil supplies may decrease. The United States produces about 5% of what Americans consume. A bipartisan group of legislators has already asked the Office of the United States Trade Representative to reconsider the imposition of a tariff on this product.

Interior of the Di Palo's store, specialized in Italian foods.

On the other hand, tariffs can benefit US producers who make national versions of cheeses that are considered essentially Italian, such as mozzarella and burrata.

But when it comes to cheese obsessed, the region where it is made and the cow or goat milk used make a difference.

If tariffs go into effect, says Di Palo, you can start selling more cheese made in the United States as an alternative to what will become a more expensive Italian product.

"I'll tell you this," he said. “While the door of Di Palo is open, it will maintain the traditions of my great grandfather and my grandparents. We will have the authentic products of Italy. The authentic wines of Italy, the authentic cheeses, the oil, the salumi. This is very important for us, ”he concluded.

European Union tariffs