What Trump's Tariffs Mean for American Cheesemakers
"I could see us getting to the point where we’re dumping our milk in the fields.”
President Trump's global steel and aluminum tariffs (25 percent and 10 percent, respectively) have not only sparked concern in the U.S. beverage industry (beer drinkers could eventually notice a bump in the price of canned brews), they've also caused countries like Canada and Mexico to retaliate with their own taxes on a signature American export — Wisconsin cheese. And as other nations work out trade agreements that grant each other more open access to their markets, America's dairy industry is finding itself further isolated in an increasingly competitive global economy. "I could see us getting to the point where we’re dumping our milk in the fields,” Jeff Schwager, the president of Wisconsin cheese production company Sartori, told the New York Times. “It’ll be a big ripple effect through the state.”
Mexico is currently America's largest export market for cheese (they buy about a quarter of our cheese products), but, with the July 5 implementation of a 25 percent tax, that could change. Back in April, the country signed a deal with the European Union that's expected to cut tariffs on European dairy products sold in Mexico, as well as trademark certain European cheese names. So, much like you can't call sparkling wine Champagne unless it's from the region of Champagne, France, soon you may not be able to sell Parmesan in Mexico unless it's made in Parma, Italy (the same goes for feta that doesn't hail from Greece, for example).
It's hard to sell a block of cheese if it's not labeled according to the name consumers have always used.
Wisconsin farmers may have been able to recoup some of their losses too by getting into the emerging Asian cheese scene if it weren't for some key Trump-imposed roadblocks. Remember when President Trump withdrew from the Trans-Pacific partnership during his first week in office? That would have allowed domestic cheesemakers to import their goods to Japan. And, similar to their deal with Mexico, the EU is looking to sign agreements with South Korea and Vietnam that would offer protections on certain European cheese names, essentially locking American-made versions out of the market.
As the Times reports, Wisconsinites believe that their state is being targeted because of its political significance. Wisconsin did, after all, vote for Trump, and it's also the home of House Speaker Paul Ryan. While there's no concrete proof of a state-specific vendetta, another Wisconsin company, Harley Davidson, is also feeling the impact of retaliatory tariffs. Today the company announced that it will be moving some production of its iconic motorcycles overseas.