US tariffs to hit Made in Italy products

Some of the most exported Italian food products to the United States risk to be severely impacted by higher US tariffs after the World Trade Organization ruled in favor of the United States as part of a long-time dispute over subsidies to airplane manufacturers.

In its largest ever arbitration ruling, the WTO decided that the United States can impose tariffs on EU goods worth a total of 7.5 billion dollars per year (6.8 billion euros). The ruling is part of the legal dispute between the two largest airplane manufacturers in the world, Airbus and Boeing, one from Europe and the other from the United States, which has been going on for 15 years.

The Office of the US Trade Representative (USTR) said the tariffs will start on October 18.

Although USTR had asked to apply a 100% tariff, the WTO limited the increase to 10% on large civil aircraft and 25% on agricultural and other products.

The tariff increase will heavily affect the Italian agri-food business in its most important destination market outside Europe. According to estimates by Italian farmers association Coldiretti, a 25% tariff increase will affect Italian food exports to the United States for a value of about half a billion euros.

THE MOST EXPORTED ITALIAN FOOD PRODUCTS TO THE US

ITALIAN FOOD PRODUCTS AFFECTED BY TARIFFS

In the black list of the U.S. Department of Commerce there are products such as Parmigiano Reggiano, Grana Padano, Pecorino, other dairy products, but also hams, shellfish, citrus fruits, juices and liquors. No higher tariffs will be imposed on some of the basic elements of the Mediterranean diet such as extra virgin olive oil, tomato preserves, pasta and wine. Parmigiano Reggiano and Grana Padano alone recorded an export value of 150 million euros in 2018, an increase of 26%. Customs tariffs for these two PDOs will actually triple from 15% to 40% of the value of the product.

ASSOLATTE: ITALIAN CHEESES AS “SACRIFICIAL VICTIMS”

“Everything as planned: the United States will hit Italian cheeses, which will be the sacrificial victim for actions committed by other EU Member States in a sector far removed from the food sector.” This is the comment of Assolatte’s president Giuseppe Ambrosi. According to the Italian dairy industries organization Asiago, Grana Padano, Parmigiano Reggiano, Gorgonzola, Mozzarella, Pecorino Romano and other Italian dairy products will suffer damage from this serious commercial retaliation.

PARMIGIANO REGGIANO: FROM 2,15 TO 6 DOLLARS/KG

What will be the consequences for Parmigiano Reggiano, for which the United States is the second largest export market with 10 thousand tons of product? According to the protection Consortium, tariffs will rise from the current 2.15 dollars per kilo to about 6 dollars. This means that American consumers will pay much more to buy Parmigiano Reggiano. Today they pay about 40 dollars per kilo; from October 18 on they will pay well over 45 dollars per kilo.

“An extraordinary intervention plan by the European Union is now necessary to prevent the effects of duties from becoming traumatic for the sectors involved,” commented Nicola Bertinelli, president of the Parmigiano Reggiano Consortium.

GRANA PADANO: “A GIFT TO COUNTERFEITING”

“We feared additional duties of 100% on Grana Padano PDO value in the USA, one of the main importing countries. Instead, additional duties will not overtake 25% – says Stefano Berni, Director of the Consortium for the Protection of Grana Padano PDO -. This is an unfair punishment and still heavy.

The choice of products to hit with additional duties seems to be aimed at favoring those sectors of U.S. production that our excellences put more in difficulty. But we are sure that those in the United States who prefer the quality that has made Grana Padano the most consumed PDO product in the world, will hardly prefer counterfeiting” – Berni adds.

UNIONE ITALIANA VINI: AVOIDED DANGER?

Ernesto Abbona, President of Unione Italiana Vini (Italian Wine Union), comments: “It’s never good news when trade restrictions are approved. In this case, even if they do not directly affect us, they affect the wine of other countries and other agricultural products, some of which Made in Italy, which have nothing to do with the cause. For this reason, we call on the EU and the USA to work for a negotiated solution on the Airbus-Boeing case avoiding the escalation of a trade war that risks impoverishing everyone.”

EU TO HELP AGRI-FOOD INDUSTRIES

“We have officially asked, as the European Parliament’s Agriculture Committee, to meet the current EU Trade Commissioner, Cecilia Malmstrom, and the future Commissioner Phil Hogan, for an urgent hearing in Brussels on Monday 7 October. Our intention – announced Italian MEP Paolo De Castro, S&D coordinator at ComAgri – is to present a list of concrete measures to be implemented immediately to support farmers and the European agri-food industry.”

PROSCIUTTO DI SAN DANIELE: “RAW HAMS ARE NOT IN THE BLACK LIST”

The Prosciutto di San Daniele protection Consortium underlines that Prosciutto di San Daniele is not on the black list of the US Department of Commerce. Mario Emilio Cichetti, general manager of the Consortium, comments: “The US duties do not include Italian raw hams, even less San Daniele ham. The black list is mainly addressed to Germany, Spain, France, and England“. The U.S. is the second largest export market for Prosciutto di San Daniele, after France, with an export share of 21%. The black list includes cooked hams, but not raw hams.

CITRUS PRODUCERS ON THE WARPATH

“Tariffs are a cleaver for thousands of farms and producers” says the president of Confagricoltura Catania Giovanni Selvaggi, also president of the Arancia Rossa di Sicilia PGI (Red Orange from Sicily) Consortium. “Oranges, mandarins and tangerines producers will suffer due to tariffs that are putting at risk millions of euros of export sales, thousands of jobs and the economic sustainability of many farms. Let’s proceed – continues Selvaggi – to a direct negotiation with the U.S.. Italian farmers and entrepreneurs cannot pay the price of a clash on a French – German airline company.”