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Import tariffs on cheese from European Union raise prices for consumers

Posted at 6:37 PM, Nov 01, 2019

Cheese Importers is a business that will directly feel the impacts of the cheese tariffs recently imposed on the European Union.

“We started in 1976 out of our family home with six packs of cheeses from Wisconsin,” Cheese Importers Co-Owner Clara White said.

From olives and pastries to European home goods, its main attraction is in the name. Cheese Importers offers a selection of 350 imported cheeses – most of them are from Europe.

“Countries like Italy, Portugal, Spain, France,” said Sascha Stanger, the Vice President of Sales, Marketing and Purchasing at Cheese Importers.

It’s a popular spot for cheese lovers. However, prices are about to go up as cheeses of all types and flavors because the European Union has just been hit with an import tariff.

"Really, it is impacting people negatively,” White said.

White and Stanger say certain cheese prices are subject to a potential 25% increase.

“[Cheeses like] Parmesan-Reggiano from Italy, Grana Padano from Italy, Buffalo Mozzarella from Italy,” Stanger said. “One of the items that will definitely be subject to change is Manchego from Spain.”

The team says they haven’t felt a huge impact yet, but they’re anticipating a potential hit to their bottom-line. Therefore, they’re looking for alternative solutions to save money.

“We buy directly from our sources in importing, but in the meantime – just to figure out how to put ourselves in a position of strength as what everyone is doing – we’d reach out to all of our importer partners across the united states and see what they would sell to us at the better price point,” White said.

Truth is, European cheese is what the business is known for. Inevitably, customers will have to pay more.

“You either have to pass it on, or you have to absorb it. And there’s not much room to absorb it. In fact, there’s no room to absorb it,” White said.

Distinguished economics professor Dr. Kishore Kulkarni with MSU Denver says there are multiple reasons the current administration could be imposing tariffs on goods from Europe. It's a way for the U.S. to generate more tax revenue. Tariffs are also a way to punish foreign exporters if the government believes a certain country is not playing on a level field. In the context of cheese, Dr. Kulkarni says it's likely the federal government is hoping the tariffs will help U.S. cheese producers earn more money.

“As we raise the taxes on the European imports, then the domestic cheese producers like it, because the price of imported cheese goes up, and then the domestic cheese producers can obviously raise their prices a little bit, and then their competition is stopped by this tax,” Dr. Kulkarni said.

However, in his opinion, tariffs are never beneficial for the economy as a whole.

“40 years of economics training has been telling me that the penalty that consumers pay, is much higher than the benefits that domestic producers get,” Dr. Kulkarni said.

When one country imposes a tariff, the other country is likely to retaliate.

“Then it just becomes a trade war, and this is a war where nobody wins,” Dr. Kulkarni said.

It's a war where the consumer is punished too.

“The fact is that the cost of a tariff gets passed along to consumers,” Cheese Importers customer Steve Pittman said.

Ultimately, Cheese Importers hopes the tariffs will be lifted. However, in the coming months, they plan to continue in good spirits providing their customers with the specialty cheeses they’ve grown to love.

“We do the very best we can with a lot of integrity and a lot of heart and soul and tighten our belts where we can and just try to be a good contributor in the world,” White said.