Experts say that Trump's European tariffs could send the cheese industry into chaos - and some popular cheeses could get more expensive

whole foods cheese resizeShoshy Ciment/Business Insider

  • Earlier in October, the Trump administration got the green light from the World Trade Organization to impose tariffs on about $7.5 billion in European goods.
  • 25% of those tariffs will fall on goods like whiskey, cheese, and olive oil.
  • A cheese industry expert says that 20,000 jobs could be affected in that industry alone.
  • Visit Business Insider's homepage for more stories.

The Trump administration is involved in a trade war with the European Union related to the aircraft industry. And, the cheese and olive oil industries are caught in the crossfires.

The US is set to impose tariffs on about $7.5 billion in European Union goods following an October 2 World Trade Organization ruling. The Office of the US Trade Representative said in a press release that the tariffs will go into effect on October 18.

A list of affected products includes European aircraft products, cheeses, wines, and olive oil. This could mean that prices on those items will rise.

Read more: Trump's proposed European tariffs could be painful for Americans who love cheese, wine, and olive oil, and industry experts estimate that close to 100,000 jobs could be affected

"Our business as it stands today would definitely change," Philip Marfuggi, the president and CEO of the Ambriola Company, which almost exclusively imports cheeses from Italy and sells them in American grocery stores, said in an email. "If tariffs continued on a long term basis our current business model would not survive. We would have to re-event [sic] ourselves."

20,000 jobs in the cheese industry could be affected by the tariffs

Higher prices on cheeses would likely mean less product selling in stores, which could translate to fewer imports and fewer jobs available for workers in the industry.

Marfuggi estimated that 20,000 jobs in the cheese industry could be affected by the tariffs through all levels of the supply chain, from sales to warehouse workers, truckers, supermarket employees, and packers.

"Agriculture should be a separate issue or trade dispute," said Marfuggi, who also serves as president of the Cheese Importers Association of America, an organization that informs and advocates on issues related to the dairy trade.

The tariffs are in response to the European Union's subsidies to Airbus, Boeing's European rival. The WTO ruled that the transactions were illegal in May 2018.

whole foods cheese resizeShoshy Ciment/Business Insider

Though the 25% tariffs are less than the originally proposed tariffs of 100%, the effects will still be felt by consumers and workers, industry experts said.

"American consumers are collateral damage to this Airbus dispute," said Thomas Gellert, president of cheese and specialty food import company Atalanta Corporation. "Lower sales will hurt all companies - supermarket and restaurants that touch these items."

Read more: We went grocery shopping at Walmart and Whole Foods and saw how Amazon's $13.7 billion bet is failing to beat the superstore in price and selection

Joe Gellert, president of leading cheese distributor World's Best Cheeses, predicted that items included in the taxes will see a reduction in sales and that importers might have to stop importing certain cheeses altogether.

Parmigiano-Reggiano is one of the more popular cheeses that will be affected by the tariffs. The Parmigiano-Reggiano Cheese Consortium, which defends artisan and natural methods for the production of parmesan cheese, estimates that the US consumer will have to pay $5 a kilogram more for Parmigiano-Reggiano cheese with the tariffs.

"The Trump Administration tariff is also an affront to American consumers who should receive a strong guarantee of traceability with Parmigiano-Reggiano, that now have to pay more for the privilege of authenticity," said Nicola Bertinelli, president of the Parmigiano-Reggiano Cheese Consortium.

The olive oil industry is also facing trouble

Joseph R. Profaci, executive director of the North American Olive Oil Association, estimated that just 5% of olive oil consumed in the US is homegrown. Most of it comes from Europe.

"The 25% tariffs will have a devastating impact on importers of these oils, and on their consumers," Profaci said, adding that he believes the tariffs will disproportionately impact Spanish olive oil companies.

To cheese and olive oil executives like Gellert of World's Best Cheeses, the tariffs seems to be missing the mark.

"We don't believe cheese should be involved in a trade war," he said.

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