Donald Trump’s tariffs war continues to send shockwaves through EU economies, Italy’s food industry being the latest chip on the negotiating table.
The economic consequences of the ongoing commercial feud between the US and the EU – initially caused by a disagreement over EU subsidies given to Airbus – have become alarmingly clearer to Italian food producers.
The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop!
— Donald J. Trump (@realDonaldTrump) April 9, 2019
Italian wines, citrus fruits and fruit juices would all be badly hit, amounting to a total of $5 to $10 billion in losses according to Italian food consortiums.
Italy’s internationally renowned Parmigiano Reggiano and Grana Padano cheeses (both strong-tasting, hard Parmesan cheeses) will be one of the most affected industries.
In 2018, 10,000 tonnes of Parmesan cheese were exported overseas. With the US’s punitive taxes, already approved by the World Trade Organization, cheese industry leaders estimate consumption in the US will drop by 80 to 90 percent.
That's largely because tariffs of up to 100 percent on the value of food products exported to the US could be slapped on as early as next October.
Industry leaders expect a total of 400,000 wheels of Parmesan cheese, which weigh on average 38kg (84lb) each, will not be sold to the US as a result.
“We’re ready to protest in front of the numerous American military bases in Italy in Montichiari, Ghedi, Longare and Vicenza to protest the WTO’s decision,” Stefano Berni, general manager of the Grana Padano Consortium, said in a statement.
“The Italian cheese crisis would be followed closely by an emergency situation in other Italian agri-food sectors such as wine, citrus fruits, grapes and jams,” Lorenzo Bazzana, manager of Italy’s National Farmers’ Confederation Coldiretti, told online daily Linkiesta.
Bazzana believes the Airbus-Boeing feud is an excuse to hide the real reason for the tariffs: the US food industry’s forgery of Italian food products and its intent to flood the market with them without competition.
In the case of Parmesan, often referred to in Italy as the 'King of Cheeses', the global fake agro-food industry sold 200,000 tonnes of the stuff outside of the EU in 2018, 15 times more than the authentic Italian produce with the “protected designation of origin” label.
“What with US tariffs and Brexit, we must do everything possible to avoid a perfect storm that'll damage the entire Italian agri-food industry,” Massimiliano Giansanti, president of agricultural confederation Confagricoltura, is quoted as saying in business newspaper Il Sole 24 Ore.
“At this point we must ask our government to urgently intervene.”
The US and EU's complicated trade spat
For more than 14 years, Washington and Brussels have accused each other of unfairly subsidising Boeing and Airbus, respectively, in a tit-for-tat dispute.
The WTO ruled in March 2012 that billions of dollars of subsidies to Boeing were illegal and notified the United States to end them.
The EU was also reprimanded by the WTO more recently, leading US President Donald Trump's administration (who have made punitive tariffs something of a signature move) to ask the trade body what the maximum amount of tariffs they could impose on the EU was.
The EU and the US have been working to set in motion a limited trade pact as part of a truce agreed in July when Trump and European Commission President Jean-Claude Juncker pledged no new tariffs following those imposed on steel and aluminum.