European products face tariff hike

Specialty food, wine makers subject to new U.S. levies today.

MILAN — European producers of specialty agricultural products like French wine, Italian Parmesan and Spanish olives are facing a U.S. tariff hike due today with a mix of trepidation and indignation at being dragged into a trade dispute they feel they have little to do with.

The tariffs on $7.5 billion worth of European goods were approved by the World Trade Organization as compensation for illegal EU subsidies to plane maker Airbus.

The U.S. has some leeway in deciding what goods it puts tariffs on. So while it is taxing European aircraft 10% more, it is walloping agricultural products an extra 25%.

“It’s a nightmare,” says Aurélie Bertin, who runs the 700-year-old winery Chateau Sainte-Roseline in southern France. “We don’t know what will be the result.”

Her rosé wine business has boomed in recent years thanks to American demand for the beverage. She fears her U.S. sales could drop by a third under the new tariffs.

The punitive taxes take particular aim at European agricultural products that have a “protected name status.” Those are goods that can be sold under a name — like Scotch whisky or Manchego cheese — only if they are from a particular region and follow specific production methods. The result is they fetch premium prices, protect cultural heritage and are shielded from competitors.

U.S.-made Parmesan cheese, for example, is not allowed access to the European market as a copycat of the traditional Parmigiano Reggiano and Grana Padano — a barrier the U.S. milk producers lobby are pressuring to bring down.

Italian President Sergio Mattarella sought to impress on U.S. President Donald Trump during a White House visit Wednesday the taxes may result in a “mere race between tariffs” after the WTO decides Europe’s case later this year over U.S. subsidies to Boeing. Trump was undeterred.

European producers feel they are collateral damage from a political squabble entirely unrelated to their business.

“We consider that we are hostages of politics. We are very, very far from aeronautics, even if our wines are served on planes every day,” said Burgundy wine producer Francois Labet.