At midnight on Wednesday, the suspension of US duties on European agri-food products was triggered, excellent news for Italian companies in the sector which every year export goods overseas for 5 billion euros and which for a few hours have seen the disappearance tariffs that weighed for 500 million euros.
US DUTIES: CAUSES AND EFFECTS
I 25% duties on agri-food products had been imposed in 2019 by the previous administration led by Donald Trump to counterbalance the public aid granted by Europe to the Dutch airline Airbus engaged for almost twenty years in a struggle for domination of the skies against the US Boeing. The aid had been judged illegitimate by the WTO (World Trade Organization) which on 2 October two years ago authorized the USA to impose punitive tariffs on 7,5 billion dollars on exports from the European Union. In further retaliation, a few months later, Brussels had itself imposed $4 billion in tariffs 15-25% on products from the USA. Finally, in January 2021 new tariffs were implemented in the United States on the import of components of aircraft production from France and Germania, on French and German wines, cognacs and brandies, which are included in the list of taxed products.
During the period of application of the duties, which affected spirits, food products, etc., Italian exports to the United States, which have always been flourishing, collapsed in some cases by 40 percent, with very heavy effects on the balance sheets of the exporting companies which, a short time later, also found themselves facing the economic crisis triggered by the Covid-19 pandemic.
THE SUSPENSION OF DUTIES
Last March 5, after a phone call with the US president, Joe Biden, the President of the European Commission, Ursula von der Leyen, announced that the reciprocal tariffs imposed by the US and the EU would be suspended for 4 months.
After the numerous frictions experienced during the Trump presidency, the new tenant of the White House intends to change register, pledging to "repair and revitalize” ties with the European Union. “As a fresh start to our partnership, we have agreed to suspend all Airbus-Boeing dispute fees on aircraft and non-aircraft products for an initial period of 4 months. We are also committed to resolving these disputes,” von der Leyen announced last week.
THE ADVANTAGES FOR ITALIAN COMPANIES
In the dispute relating to the Airbus-Boeing affair, Italy has played a very marginal role over the years. Despite this, our agri-food companies have paid a very high price with exports hit for about 500 million euros, 10% in a sector worth 5 billion euros.
In fact, the products subject to tariffs include cheeses, salami, mortadella, crustaceans, molluscs, citrus fruits, juices and liqueurs. The flagship of Made in Italy agri-food.
“With a 21% drop in exports in 2020 I am Made in Italy cheeses the agri-food products which – underlines Coldiretti in an article – benefit most from the stop to additional US data which has favored unfair competition from US imitations which do not have to comply with the strict regulations of national productions starting with Parmesan whose production worldwide has even exceeded that of the original Parmigiano Reggiano and Grana Padano. But hard hits have also been, in addition to cured meats, aperitifs and liqueurs which in the US market have lost about 40% of their export value in the last year. Unlike the French and German ones, Italian wine was saved, which however suffered the consequences of the catering lockdown with a drop of 4% in 2020".
The benefits of the suspension on Italian cheeses are therefore enormous. For the US, Italy is the first foreign supplier of cheeses (about 38.000 tons in 2019, for a value of almost 350 million euros) while, for Italian companies, the USA represents the first non-EU destination. To be affected by the tariffs, recalls Assolatte, were Grana Padano and Parmigiano Reggiano (-24% in value), Provolone -20%, Asiago -31%, Gorgonzola -13%.
"The USA represent the first export market, a 20% share of total exports equal to about 12 thousand tons of product and we hope that the Biden administration will put an end to this commercial dispute which is no longer sustainable", underlines Nicola Bertinelli, president of the Parmigiano Reggiano Consortium.
Advantages also for the manufacturing companies liqueurs. "The announced suspension of duties - comments toHandle Micaela Pallini, president of the Spirits Group of Federvini – represents a breath of fresh air for our aperitifs and liqueurs which, in the US market alone, have lost about 40% of their export value in the last year”.
And finally too cured meats and hams. “From our observatory – says Lisa Ferrarini, president of the homonymous group – we are seeing a good liveliness in the request from our customers in the States. In addition to household consumption, the demand from the catering world is restarting, thanks to a vaccination campaign that has come to life, after months of total blockade.
Coldiretti also explains that "The entry into force in the USA of the moratorium of only 4 months on additional duties of 25% on imports triggers the race for Made in Italy products to fill the warehouses”, stocking up on products which, without a definitive agreement, could again be subject to tariffs in mid-July. "It is precisely this term that is making orders fly even if the hope is that it will be a sufficient period of time to find a definitive agreement" says the president of Coldiretti Ettore Prandini, underlining however that despite the duties and the Covid emergency, in 2020 the export of Italian agri-food products to the USA recorded a 5% growth.
