An obscure fight over aerospace subsidies is likely to become a kitchen table issue for US consumers as the Trump government prepares to attack Italian cheese, French wine and other European delicacies with retaliatory tariffs this month.
That could mean higher pecorino prices for its noodles, a more expensive bottle of Bordeaux on steak night, or a more expensive glass of whiskey at the bar, analysts and importers say.
The World Trade Organization has lit up tariffs after 15 years of dispute over EU subsidies to Airbus. The US said the subsidies were illegal and hurt US companies like Boeing. The WTO agreed and awarded the US a $ 7.5 billion arbitration award and gave President Trump another trade victory to be presented.
US Trade Representative Robert Lighthizer plans to impose a 10 percent tax on aerospace products and 25 percent on agricultural products – including British cashmere, German roasted coffee and Spanish olive oil – on October 18.
Some business groups have difficulty digesting why importers need to decide whether to absorb the cost of tariffs or pass them on to consumers.
The Specialty Food Association has stated that its products should not be caught in the sights of a "purely industrial" nature struggle. They said the price of meat, cheese, olives and other foods will rise by 25% to keep up with rates.
Michael Sands, owner of Calvert Woodley Fine Wines and Spirits in the District of Columbia, said that "there are still many unknowns" about the rates, but the store will have to raise prices if the rates apply. With its business margins, he said, his store could never "eat" that kind of increase in the cost of French and Spanish wines or the Italian cheese it sells. It's even harder to swallow at the end of the vacation.
"There is not a good time of year for this type of fare, but this time of year is especially bad for us and other retailers, as well as wholesalers, consumers – just about everyone," Sands said in an email. "It's horrible to get caught in this kind of situation, mainly because of something that really has nothing to do with wine, liquor, cheese, etc., but unfortunately that's how it happens."
Tariff policy is complex; therefore analysts predict a number of effects on the market. Buyers who can buy cashmere will probably still buy luxury blouses, although coffee consumers may choose different brands to avoid price shocks.
European producers, in turn, may feel a squeeze if they lose market share in the US.
"We're all connected, which is why tariffs are so damaging. They affect all parties," said Gabriella Beaumont-Smith, macroeconomic policy analyst at the Conservative Heritage Foundation.
Trump insists that tariffs are effective in correcting trade imbalances and demanding fairer treatment from other countries.
Famously, he exercised tariffs against China and devoted himself to French wine in particular months ago. France infuriated the president by taxing digital companies like Google and Facebook. He said American wine is better anyway – even if he is a non-drinking teacher.
Trump celebrated the WTO's decision to approve large rates on Europe last week. He told reporters that he has amassed "many WTO victories since I became president."
The administration is mainly punishing the four countries responsible for helping Airbus: the United Kingdom, France, Germany and Spain. However, it is spreading tariff pain across the European Union due to its failure to end subsidies.
"The EU collectively takes responsibility for the dispute that reaches this point," the US Trade Representative's Office said in a statement to The Washington Times. "The list also targets products from key sectors for the EU and will encourage the EU to address its inconsistent WTO subsidies."
Analysts said tariffs could complicate trade with European countries, especially as the government sees a trade deal with the United Kingdom if and when the British leave the EU.
While targeted products are popular – Twitter jokers said tariffs on Scotch should speed impeachment processes – analysts said the government may be betting that consumers will not change their habits or feel that the US can generate more. revenue from targeting goods that people like.
Charged items also have a lot of competition. A French wine aficionado could exploit a New Zealand sauvignon blanc, and home cooks could use home replacements for olive oil and cheese.
This comes with its own tradeoffs, however, because tariffs target regional products that depend on the unique climate and crafts of different parts of Europe.
Sands said customers can look for wines from non-tariff regions.
"Certain rare Bordeaux and Burgundy cannot be replicated, but in general there are so many great wines from around the world, so the options for customers are virtually limitless," he said.