American companies are reportedly now stockpiling European cheese ahead of the Trump administration's planned retaliatory tariffs against EU imports.
The US recently received the green light from the World Trade Organization to impose tariffs on over $7.5 billion worth of EU goods as punishment for the trading bloc's illegal aircraft subsidies to Airbus.
US firms such as Ambriola Co are reportedly buying tons of cheeses such as Grana Padano, Parmigiano, Reggiano, and Pecorino Romano and stuffing them into their massive warehouses. Ambriola is a unit of Auricchio SpA, Italy's largest cheese producer.
The company's CEO Phil Marfuggi had mentioned that other companies and shop owners across the country are scrambling to fill their warehouses ahead of the tariffs, which are scheduled to take effect on October 18. Marfuggi explained that most of these companies are hoarding cheeses to prevent a massive spike in prices when the tariffs take effect.
According to industry insiders, millions of dollars worth of cheese are now making their way into the country ahead of the planned tariffs. Marfuggi revealed that his company still has 21 shipping containers full of different types of cheeses that are on their way to their warehouses. The executive said that Ambriola had ordered around $15 million worth of cheeses, which it estimates should last for an entire year.
Marfuggi, who is also the president of the Cheese Importers Association of America, predicts that overall US imports of EU cheese could drop by as much as 30 percent when the tariffs are imposed. Higher-priced cheeses such as aged Italian cheese could completely disappear. Marfuggi predicts that even with their massive stockpile, cheese prices throughout the country could still drastically increase.
Apart from Ambriola, major retailers such as Costco and Wegmans Food Market import massive amounts of cheese, estimated to generate around $3.5 billion in revenue. The country's cheese industry is estimated to support around 20,000 jobs, including truck drivers, warehouse workers, and deli operators.
The Trump administration's tariffs against the EU will mainly target the four Airbus consortium countries, namely Germany, France, Britain, and Spain. Apart from the aforementioned countries' cheese imports; other items that will be slapped with added tariffs include wines, sweaters, wool, tools, and a number of other luxury items.
A 10 percent tariff will be imposed on all Airbus airplanes heading for the US, while a 25 percent levy will be imposed on all of the other items on the country's list. The US has intentionally excluded some EU-made goods, including Italian wine, olive oil, and chocolates.
The United States and the EU have mentioned that they are still open to negotiating to avoid the imposition of the tariffs. However, analysts have stated that there is likely a very slim chance that the planned duties can be averted.