US hits Scotch whisky, Italian cheese, French wine with 25 per cent tariffs

The US Trade Representative's Office released a list of hundreds of European products that will get new tariffs, including single-malt Scotch whisky.
The US Trade Representative's Office released a list of hundreds of European products that will get new tariffs, including single-malt Scotch whisky.PHOTO: REUTERS

WASHINGTON (REUTERS) - The Trump administration put 25 per cent tariffs on French wine, Italian cheese and single-malt Scotch whisky - but spared Italian wine, pasta and olive oil - in retaliation for European Union subsidies on large aircraft.

The United States Trade Representative's Office released a list of hundreds of European products that will get new tariffs, including biscuits, salami, butter and yogurt - but in many cases applied to only some EU countries, including German camera parts and British-made blankets.

The list includes British-made jumpers, pullovers, cashmere items and wool clothing, as well as olives from France, Germany and Spain, EU-produced pork sausage and other pork products other than ham, and German coffee. The new tariffs are to take effect as early as Oct 18.

The announcement came after the World Trade Organisation gave Washington a green light to impose tariffs on US$7.5 billion (S$10.38 billion) worth of EU goods annually in the long-running case, a move that threatens to ignite a tit-for-tat transatlantic trade war.

The measures would follow tariffs levied by the US and China on hundreds of billions of dollars of each other’s goods in their more than year-old trade war.

In the latest move against Europe, the US Trade Representative's Office said it would "continually re-evaluate these tariffs based on our discussions with the EU" and expects to enter talks in a bid to resolve their dispute.

Still some Italian foods - parmesan, reggiano, romano and provolone cheese - were hit with tariffs, as were Italian fruits, clams and yogurt. Also getting new tariffs are German and British camera parts, industrial microwave ovens, printed books, sweet biscuits and waffles.

The biggest single tariff imposed is a 10 per cent levy on EU-made airplanes, a levy that could hurt US airlines that have ordered billions of dollars of Airbus aircraft.

EU products winning reprieves include chocolate, Greek olive oil, helicopters, frozen fish, lobster, sparkling wine, stemware and tiles.

Meanwhile, US whisky producers have been hard hit by the EU's 25 per cent tariffs that were imposed in June 2018 in response to US tariffs on steel and aluminium.

Speciality food importers had urged the Trump administration not to move forward with the tariffs, saying in August "there are few to no domestic products that can replace these imported speciality foods".

 
 

The Specialty Food Association said there were 14,000 US speciality food retailers that would impacted by these tariffs as well as over 20,000 other food retailers.

Mr Ralph Hoffman, executive vice-president of New Jersey-based Schuman Cheese, one of the largest importers of hard Italian cheeses, said the tariffs could reduce his company's imports by 30 per cent, and the impact would come in the middle of the critical holiday season.

"It looks pretty bad. They hit cheese hard," said Mr Hoffman, who is also a vice-president with the Cheese Importers Association of America.

Mr Hoffman said Schuman and other companies have been buying extra amounts of cheeses with a longer shelf life, but there was a limit to how much hedging they had been able to do.

He said the company brings in over 1,100 containers of cheese each year, serving many big box stores such as Costco and BJ's Wholesale Club.

"This will put a massive dent in that," he said.

Mr Phil Marfuggi, president and CEO of Ambriola Co Inc, a unit of Auricchio SpA, one of Italy’s largest cheese producers, said 25 per cent was lower than the 100 per cent tariff initially threatened, but it came on top of 10 to 15 per cent tariffs already paid on speciality cheeses.

Mr Marfuggi, who also serves as president of the Cheese Importers Association of America, said his firm faced extra costs of up to US$70,000 (S$96,880) each for a dozen containers due to arrive in US ports after Oct 18, if USTR does not grant a shipping grace period.

Mr Robert Tobiassen, president of the National Association of Beverage Importers, said the new tariffs on whisky, liqueurs and cordials, and wine from certain EU countries, would hit many of the US’ 12,000 importers hard.

"These tariffs will devastate, perhaps destroy, many small and medium sized family businesses importing these products into the United States," he said.

Many of the tariffs, especially those on alcohol, were not popular on social media.

Professor Jacob Levy, an expert on political theory at McGill University, wrote on Twitter that the tariffs were "an interesting strategy for lowering the trillion-dollar deficit: increase everyone's need to drink to get through each day's news, then tax the heck out of the good alcohol".