The pitted olives imported from Sicily are flying off the shelves at an Italian deli on the west side of Scranton, the industrial city in north-eastern Pennsylvania. But Paul Catalano, the outspoken 76-year old owner of the family business, which has operated in the neighbourhood for nearly a century, cannot rest easy.
If the Trump administration imposes threatened tariffs on EU goods in retaliation for subsidies granted to Airbus, the European aerospace company, Italian food products ranging from those olives to cheese and pasta that account for 40 per cent of Mr Catalano’s store would become more expensive.
“Once you start raising prices you start losing business,” Mr Catalano said. “That would put a crimp in our sales”.
Earlier this year, the WTO issued a final ruling authorising the US to impose the tariffs on the EU in the long-running Airbus case. This week arbitrators at the Geneva-based body will set the value of allowed retaliation at up to $8bn — the final hurdle before Washington can press ahead with the punitive measures.
Although such levies would be fully compliant with WTO rules — as opposed to many of the other tariffs imposed by Mr Trump since taking office — they are nonetheless bound to further increase trade tensions between the US and the EU at a time when they are already severely strained.
A tit-for-tat escalation is likely, as a parallel case brought by the EU against the US’s subsidisation of Boeing is also in its final stage, and officials in both Washington and Brussels have failed to find an amicable resolution.
Apart from Italian food, many other delicacies from across the continent — such as French Roquefort and champagne, Irish whiskey and German pork sausages — are also in the line of fire along with manufactured products such as table knives, ceramics, sweaters and suits. Aircraft and helicopters, as well as certain aerospace parts directly related to the Airbus case — are also on the roster.
But Italian officials and executives as well as Italian-American importers believe they are being unfairly attacked, since Italy is not part of the Airbus consortium, which is composed of France, Germany, Spain and the UK.
“I agree with this president’s tariffs. The bad actors who illegally subsidise Airbus should be punished. But Italy was not one of them,” said Lou Barletta, a former Republican congressman from Pennsylvania and the head of the American Italian Food Coalition, a lobby group formed to fend off the levies.
Italian ministers and industry associations are mounting their own campaigns against the tariffs ahead of a visit by Mike Pompeo, the US secretary of state, to Rome this week to meet with Prime Minister Giuseppe Conte. Stefano Berni, the director-general of the Consorzio Grana Padano, the trade body representing manufacturers of the cheese, said his members were ready to protest in front of US military bases in Italy, including Aviano, in north-eastern Italy.
Nicola Bertinelli, president of Consorzio Parmigiano Reggiano, which represents producers of the well-known cheese, warned that consumption could fall sharply in the US, the second largest importer of Parmigiano in the world after France. This would then have devastating consequences across Europe as the excess supply of cheese flooded the market. “Why should Italy suffer these consequences when it has always been a reliable partner of the United States? Why should we have to pay this unjust tax?” He asked.
Mr Bertinelli’s group recently met with the Italian ambassador to the US and the US Chamber of Commerce to discuss the tariff threat. While it is unclear how the US will implement the tariffs, the Parmigiano producers said they could be rotated among different products.
The blowback from the US tariffs on Italian cheese could also have domestic political ramifications in a country where angry milk farmers have long been courted by the anti-migrant leader of the League party, Matteo Salvini, who recently left government and is now in opposition.
Earlier this year, low milk prices prompted protests in Sardinia by farmers who poured gallons of milk on to roads instead of selling it at a price they said was not financially viable.
Teresa Bellanova, Italy’s agriculture minister, said that the tariffs “would endanger jobs, businesses, families, entire areas”.
“The United States is the most important market for our wines and quality production,” she said. “It is necessary and urgent to strengthen our dialogue with the US administration to avert such a huge risk”.
Back in Pennsylvania, Mr Barletta’s concern was that the levies would be “hurting Americans”, rather than Italians. “We all have our favourite Italian restaurants, and mom-and-pop businesses — they are part of our communities. Italian food has become part of American culture. What’s America without pasta?”
Mr Catalano, who sympathises politically with Mr Trump, hopes they can be avoided at the last minute. “If the tariff goes on it will hurt Trump and everybody concerned,” he said. “I think they are smart enough and once they realise that Italy had nothing to do with it they will reconsider.”
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