Moneybox

Trump Is Slapping a 25 Percent Tariff on European Wine and Cheese Because of a Fight Over Airplanes

Wheels of Parmesan cheese on racks.
The next victim of Trump’s tariffs?
Reuters/Alessandro Bianchi

Well, everybody, prepare to pay more for your Parmesan. The Trump administration announced on Wednesday that it would follow through on its threat from earlier this year and slap tariffs on European wine, cheese, charcuterie, whiskey, and suits, among a host of other luxe products, as part of a long-running trade dispute over subsidies for airplane manufacturers, of all things.

The move followed shortly after the World Trade Organization officially gave the U.S. a green light to impose duties on up to $7.5 billion worth of goods from the European Union, as punishment for subsidies it provided to Airbus, the EU’s leading maker of commercial planes. This was the final ruling in a winding 15-year conflict and gave American authorities the right to place levies on any European imports they chose as retribution. The U.S. has settled on a list that, in part at least, reads like a catalog of stuff that bougie blue state urbanites love. Along with a 10 percent tariff on airplanes, the administration is placing new 25 percent tariffs on an array of clothes, industrial goods, and agricultural products. French wine, Spanish olive oil, Scotch whiskey, Italian hams, German knives, and all manner of cheese—pecorino, Parmigiano-Reggiano, Gouda, blue cheese—will come in for border taxes. So will all sorts of British menswear. Basically, if you’re the sort of person who subscribes to Bon Appétit or GQ, you should feel personally attacked.

Which, look, is objectively sort of funny. In one fell swoop, Trump is owning us libs and the French. You don’t have to like the game, but you can respect it. It’s like when he slaughtered the state and local tax deduction, except instead he’s jacking up the price on your next wine and cheese party. Moreover, Trump isn’t imposing these tariffs as part of the one-man, kamikaze-style trade war he’s waged over products like steel or literally everything China sells us. Instead, he is implementing them through the normal channels through which trade disputes are supposed to be litigated, which is sort of refreshing, in a way.

The tariffs are also less severe than they might have been. When the administration first announced the list of products it might target this summer, it proposed tariffs of up to 100 percent, leading New York magazine to warn of a “cheesepocalypse.” By comparison, a 25 percent tariff is mild.

Placing tariffs on economically sensitive but symbolically important agricultural producers is also a well-worn trade tactic, and Trump’s move obviously isn’t just about trolling New York’s wine lovers.

But the real victims of these tariffs aren’t really going to be flustered foodies who are upset about having to pay $7 extra for their bottle of riesling. They’re more likely to be small businesses like wine shops and gourmet food stores that sell these products, who may lose price-sensitive customers or take a hit on their already slim profit margins. Those businesses may shift to selling more double creams from Vermont or pinot from Oregon, but if you’re, say, an Italian cheese shop in lower Manhattan, there’s only so much you can do to change up your product mix. Restaurants could also feel the pinch; after all, there aren’t a lot of great American substitutes for a good Parm.

It’s also possible that this will be just one stage of a tit-for-tat trade battle over airplanes that could ramp up. EU officials are prosecuting their own case against the U.S. for allegedly subsidizing Boeing illegally, which could end with tariffs on American exports. The Europeans have asked the U.S. to negotiate a settlement before things escalate further, but so far, no dice.

So I’d suggest stocking up on your favorite Scotch before prices jump. The U.S. says the tariffs officially go into effect on Oct. 15.