Major Victory: US Importers Stockpile Cheese and Scotch

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In retaliation for EU subsidies on Airbus, Trump will impose tariffs on cheese and scotch. Importers stockpile both.

In an alleged "major victory" for Trump, the US Trade Representative announced U.S. Wins $7.5 Billion Award in Airbus Subsidies Case.

Bear in mind, Airbus is expected to win a larger WTO suit against Boeing next year.

It would seem that the best course of action would be for Boeing and Airbus to stop illegal subsidies, but that's not how Trump's mind works.

Trump Strikes Back

In retaliation for Airbus subsidies, Trump will strike back at the EU with tariffs on cheese and whisky makers.

This started a chain reaction in which U.S. Importers Stockpile Parmigiano and Provolone.

Ambriola Co Inc’s mammoth warehouse in West Caldwell, New Jersey, is crammed full of boxes and wheels of harder cheeses such as Parmigiano Reggiano, Pecorino Romano and Grana Padano - and more is coming, lots more.

Phil president and chief executive officer of Ambriola, a unit of Auricchio SpA, one of Italy’s largest cheese producers, is among the many importers and shop owners across the country who are scrambling to stockpile European cheeses before new U.S. tariffs kick in on Oct. 18 in efforts to shield consumers from price hikes.

The Trump administration on Wednesday slapped 25% tariffs on cheese and other European Union products ranging from whisky to woolens, in retaliation for EU subsidies on large aircraft. Both sides say they are open to negotiations, but trade experts see little chance of averting the duties - at least in the short run.

Some higher-priced items will simply disappear from stores, he predicted, like Moliterno al Tartufo, an aged Italian cheese with an intense truffle flavor. Even Parmigiano Reggiano could be at risk if prices rose to $30 a pound, he said.

Scotch Too

For now, EU Pledges Restraint as U.S. Moves to Add Tariffs

President Trump, who has repeatedly claimed the EU has taken advantage of the U.S., is also poised to decide by Nov. 13 on whether to impose duties on imports of European cars and auto parts. “A nice victory!” Mr. Trump tweeted on Thursday, hailing the WTO award in the long-running aircraft fight.

Washington strategically crafted its list to hit exporters across the EU, and particularly in the four countries that make up the Airbus consortium—Britain, France, Germany and Spain.

Of the U.K. products targeted by the U.S., single-malt Scotch whisky makes up more than half of the total value—more than $460 million, according to the Scotch Whisky Association, a trade organization. “The U.S. is our largest and most valuable single market,” SWA Chief Executive Karen Betts said, citing some $1.25 billion in annual exports. “It will undoubtedly damage the Scotch whisky sector.

Despite the EU’s current restraint, the threat of escalation persists. European officials warned the EU would hit back if U.S. duties are still in place when the bloc receives its WTO award in the Boeing case.

Case Started in 2004

The Boeing-Airbus dispute started in 2004.

Here are the Highlights of the 15-year Airbus, Boeing Trade War.

The US won the case against Airbus, but in March of 2019, the WTO said the "U.S. has again failed to halt subsidized tax breaks to Boeing in Washington state."

The EU's claim against Boeing is $20 billion. A final ruling isn't in, but most of the reports I have seen suggest something north of $11 billion.

Victory at Last

It is on this expected negative differential that Trump has proclaimed "victory".

No Winners

The WSJ sums things up nicely Boeing-Airbus Is a Trade Dispute Without Winners.

Instead of going after airliners, Trump targeted cheese and scotch.

Why?

Airbus employs 3,000 highly skilled workers [in the US]. The most important site is in Mobile, Ala., which builds the best-selling A320 model and the state-of-the-art A220—which Airbus bought from Canadian manufacturer Bombardier in 2017. All of these jets need imported parts from Europe.

Bring on the Parmigiano!

Meanwhile, please note Trump Winning So Much It Almost Seems Unfair.

Mike "Mish" Shedlock

Comments (35)
No. 1-16
ElPendejoGrande
ElPendejoGrande

If we keep winning like this, we're going to be standing in Victory Lines to get into stores with mostly empty shelves! MAGA!

Mish
Mish

Editor

These tariffs are stupid but mostly meaningless except for some importers who may be put out of business.

The car tariffs Trump threatens would not be meaningless

Webej
Webej

These imports will really hit the EU dairy sector hard. The price of butter has doubled the past two years, as has the price of skim milk and milk powder products, mostly due to heavy selling of milk powder (etc) into the Chinese market. It means US consumers will pay more and EU consumers may get some price relief.

Webej
Webej

I just hit the car in front of me. I only broke the radiator and some damage to the grill, headlights, etc. The other guy's gas tank was leaking, trunk and back bumper completely distorted, basically totalled. I just won big. The other guy was really upset, especially because I was kind of smirking as I compared the damages.

Winning Big Time.

Webej
Webej

It is almost impossible to disentangle the embedded and hidden subsidies provided by tax facilities, regional services sweeteners, government and military orders, regulatory relief or obstacles as well as generalized subsidy and incentive measures from real prices, especially with behemoth airplane companies. The USA will never admit that there is bias in government tenders for Boeing products, or that military pork spending cross subsidizes the airplane sector, or anything else. The EU will continue with better hidden subterfuges.

This dispute, like agriculture subsidies, has proven to be a perennial.

njbr
njbr

On the important Spanish olive oil front (also tariffed)

....Data from the International Olive Council shows that Italy produces 300,000 tons of olive oil per year on average. During the same time span, though, it retails a whopping 500,000 tons for domestic sales, with another 330,000 marketed for international consumption. A 2017 investigation from Italy's state-run RAI television uncovered that about half of the "100% Italian" olive oil bottles sold within the country contains product from other countries. Based on those numbers, Italy would need to draw about 580,000 tons of olive oil from outside sources every year.

A significant chunk of that is coming from Spain, as the Customs of Spain reports that it exported over 355,000 tons of its olive oil to Italy last year. As the world's largest olive oil producer, Spain easily has the capability to produce that much oil....

Kind of like the rapidly relocated Chinese factories...who knew olive oil was so slippery?

themonosynaptic
themonosynaptic

Has anybody told him the Scotland doesn't build Airbuses? Mobile, Alabama is an Airbus manufacturing base however. How about tariffs on the stuff they try to call Whisky from there.

Taxing whisky is going too far - the ruling elite will be buying pitchforks for their staff at this rate!

numike
numike

just verifying that this is fake/myth right? 600 Years of Grape Harvests Document 20th Century Climate Change A 664-year record of grape harvest dates from Burgundy, France, reveals significantly warmer temperatures since 1988 https://eos.org/articles/600-years-of-grape-harvests-document-20th-century-climate-change

thimk
thimk

real shame -EU food/spirit products are of exemplary quality . I guess we will have to eat "american cheese" aka velveeta .

Mish
Mish

Editor

Is velveeta even cheese? What is it?

I also don't think Wisconsin cheese is any good

Typically eat imported Cheddar and Gouda

Feed Mozzarella to our dog, but I do like that on Italian dishes and Pizza

I make a great fondue with Parmesan, Gouda, and one other cheese that varies depending on what I have

thimk
thimk

@thimk side note - trump squeaked by wisconsin in 2016 as a win . Tariffs on cheese imports maybe a political move.

Country Bob
Country Bob

I can't believe Mish is so worked up about cheese and whiskey. And he wonders why many people think he has Trump Derangement Syndrome.

When you can't make it a week without finding something to complain about, so you start whining about imported cheese... you've got TDS

Koyote
Koyote

WOW, such a hassle to get to this point to make a comment. Anyways, I would think that the high prices the U.S. would charge imports in what is known as tariffs, would work in the Repubs/donald's favor..."BUY AMERICAN". However, I do admit that as an independent, I prefer provolone and Canadian Club Whisky.

ywdwarner
ywdwarner

If the UK leaves the EU , the tariff will have no effect on Scotch ? It would make Irish and French liquors more expensive , a Socialist helping hand for Americans.

kickingass
kickingass

EU makes Scotch? I thought that comes from Scotland.....part of England and part of brixit?

JustASimpleMan
JustASimpleMan

Why, I wonder, add tariffs on Scotch whisky? There are no major airbus bits manufactured in Scotland, probably just the toilet roll holders for the A320.

But of course ......... he's still mad at the Scottish government for not letting him trample all over the planning regulations at Turnbury golf course, building over 500 "luxury" properties. They also had the temerity to allow an offshore wind farm that would district the big hitters at the eleventh tee. Having lost £33M over 4 years since he bought the course he needs a way to look like a successful investor.

Who says Trump can't make sensible, well thought out decisions?