USA, tariffs at 20% take effect

Following President Donald Trump's announcement, the EU announces European countermeasures but says it is "ready to negotiate." Reactions from agriculture and the food industry
USA, tariffs at 20% take effect

U.S. President Donald Trump made the long-awaited announcement on trade tariffs last night, which will now affect more than 100 countries and concern all goods imported into the United States. The European Union, and consequently Italy, will suffer tariffs of 20 percent. The base tariffs of 10% towards all countries are expected to take effect on April 5, while the additional ones will take effect on the 9th.

The European Commission responded by announcing “further trade countermeasures”. However, the President of the EU Commission, Ursula von der Leyen, reiterated that she is “ready to negotiate” with the United States to avoid “immense consequences” for the global economy. “President Trump’s announcement of universal tariffs on the whole world, including the European Union, is a severe blow to the global economy,” explained Von der Leyen. In this regard, she added that the EU will also follow “carefully the indirect effects that these tariffs could have because we cannot absorb global overcapacity or accept dumping on our market.” The European Commission expects a rise in inflation and higher prices in the most diverse sectors: from healthcare to transportation.

AGRI-FOOD: ITALIAN EXPORTS TO THE USA

Italian agri-food exports to the United States reached about 7.8 billion euros in 2024. The sectors that are worth the most, according to Cia – Italian Farmers, are: wine (two billion), oil (almost one billion), pasta (one billion), and cheeses (550 million). And tariffs can do a lot of harm. “It is difficult to estimate the effect of universal tariffs of +20% on all food exports to the United States, as each product category has different elasticity curves, and for some sectors, there are no precedents on which to base forecasts”, says the President of Federalimentare, Paolo Mascarino. “Our prudential forecast is a 10% loss of turnover, i.e., about 700 million euros divided differently across the various product categories exported to the United States”.

COLDIRETTI: THE COST OF TARIFFS FOR AMERICAN CONSUMERS

The 20% tariff on all Made in Italy agri-food products will lead to a 1.6 billion increase in costs for American consumers, with a drop in sales that will damage Italian businesses, as well as increase the phenomenon of Italian sounding. This is the estimate of Coldiretti, which believes that the drop in sales should be added to “the damage in terms of depreciation of production, to be calculated chain by chain, linked to the excess supply without outlets in other markets. It is now necessary to work on a diplomatic solution to be carried out at the European level”.

The other factor that worries is the danger – Coldiretti continues – of losing market shares and shelf positioning gained, favoring competition from other countries affected less heavily by tariffs.

“This must also be an opportunity for Europe, which must remain united more than ever in this phase and speak with one voice, to put in place a plan to revive the production sectors: starting with debureaucratization, but also injecting new resources”, emphasizes the President of Coldiretti, Ettore Prandini. “Useless bureaucracy that has slowed everything down and significantly affected our companies. We need an injection of new economic resources to invest in digitization and innovation and with precision agriculture for our sector.”

“Faced with the US decision, it is vitally important to avoid rash moves. Diplomacy must be put in place”, adds the Secretary-General of Coldiretti, Vincenzo Gesmundo. “Italy and Europe must carry on the dialogue because the logic of tariffs and counter-tariffs has proven over time to be short-sighted and counterproductive for everyone”.

REACTIONS FROM THE SUPPLY CHAINS: PARMIGIANO REGGIANO

Among the first to comment on the extent of the American tariffs, the President of the Parmigiano Reggiano Consortium, Nicola Bertinelli: “The tariffs on our product go from 15% to 35%. Certainly, the news does not make us happy, but Parmigiano Reggiano is a premium product, and the price increase does not automatically lead to a reduction in consumption. We will work to try to make it clear through negotiations why it does not make sense to apply tariffs to a product like ours, which is not in real competition with American Parmesan. We will roll up our sleeves to support demand in what is our first foreign market with 22.5% of the total export share”.

Parmigiano Reggiano covers about 7% of the hard cheese market in the United States and is sold at more than double the price of local Parmesan. “We are not at all in competition with local cheeses – Bertinelli emphasizes – these are different products that have different positioning, production standards, quality, and costs: it is, therefore, absurd to hit a niche product like Parmigiano Reggiano to protect the American economy. In 2019, when Trump introduced additional tariffs of 25%, Parmigiano Reggiano was the most affected product with an increase in shelf price from 40 to 45 dollars per kilo. Fortunately, the tariffs were then suspended on March 6, 2021, and did not create problems for us in terms of sales. Americans continued to choose us even when the price increased. In the United States, those who buy Parmigiano Reggiano make a conscious choice: it has a 93% market share of alternatives that cost 2-3 times less. Imposing tariffs on a product like ours only increases the price for American consumers, without really protecting local producers. It is a choice that harms everyone”.

ORIGIN ITALIA AND QUALIVITA: TARIFFS FUEL UNFAIR COMPETITION

The trade war triggered by the Trump administration’s tariffs risks having negative effects not only on the economy but also on social cohesion and the stability of Italian rural areas. The Qualivita foundation and the Origin Italia association are convinced of this, according to which “it is not just about numbers: a development model is at risk that, in recent years, has allowed the revival of fragile local economies through the enhancement of PDO and PGI products”.

The Qualivita Foundation Observatory has documented over time “how Geographical Indications have allowed numerous territories to build a solid and identity-based economy, capable of generating employment, protecting the territory, and promoting environmental and cultural sustainability. All this has been possible thanks to the added value recognized to GI products in international markets, both for the best-known Italian PDOs and for those of smaller dimensions. A value that cannot be delocalized, closely linked to the origin and culture of the territories.”

However, tariff barriers represent a significant obstacle to this path. They limit access to global markets, penalize quality productions linked to origin, and favor standardized or imitation products made locally. The damage also extends to the level of rights: tariffs violate the principle of intellectual property protection recognized internationally to Geographical Indications, hindering the full exercise of this right by legitimate producers. “The protection of GIs must be guaranteed through fair trade free from unjustified obstacles, in compliance with international agreements”, say Origin Italia and Qualivita. Cesare Baldrighi, President of Origin Italia, comments: “We ask for urgent intervention from Europe and Italy to strongly defend the GI system in international forums, to support a strategic economic sector and protect the 300,000 Italian companies and their 900,000 employees who adhere to the PDO and PGI system in Italy”.

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