Escalating tariffs hit cheese makers in ‘America’s Dairyland’

Global Business

Many in this state are sympathetic with U.S. President Donald Trump’s attempts to redress what he sees as trade imbalances.

Global trade disputes are impacting products of all sizes – from big ticket items like cars and washing machines down to, well, a block of cheese. In response to U.S. tariffs, China and Mexico have raised import duties on U.S.-made cheese. And that’s on top of already high tariffs on American dairy bound for Canada. CGTN’s Hendrik Sybrandy reports from Wisconsin.

Big dairy states like Wisconsin are nervous over the escalating trade war between the United States and China and wondering when and how it will end.

“Cheese is more than a cultural icon for us,” said John Umhoefer, Executive Director of the Wisconsin Cheese Makers Association. “It’s big business in Wisconsin.”

In fact, cheese has put food on the table in the state for many, many years.

“Sartori Cheese, our ambition is to make the best cheese in the world,” said Blair Wilson, Sartori’s Vice President of Marketing.

 The 4th generation family-owned company makes gourmet cheeses. That’s what Wisconsin is known for. One-tenth of Sartori’s revenues come from cheese exports and, as with other cheese makers, that number has been rising. But tariffs of up to 25 percent, just imposed by Mexico and China, two of America’s largest cheese export markets, threaten to sour the situation.

“It’s compressing our margins,” said Wilson. “It’s making that business unprofitable.

“Our goal is to increase exports and we want great traders and we want to grow exports, so this is not good for Wisconsin,” said Umhoefer.

He added that more expensive U.S. cheese will only cause that cheese to pile up unsold, further depressing already low milk prices. Umhoefer said China bought $50 million worth of Wisconsin dairy products last year and he worries it will now look for other suppliers, just as Wisconsin producers may have to look for new customers.

“This level of volatility makes it difficult from a planning aspect to make sure we’re being profitable and doing the right things for our family farms,” said Wilson.

Many in this state are sympathetic with U.S. President Donald Trump’s attempts to redress what he sees as trade imbalances. But they don’t want to see the tariffs drag on.   

“It’s not good but we’re hoping that it’s temporary,” said Umhoefer. “We’re hoping that it’s a part of negotiation and as it moves forward the tariffs will not stay at this level.”

The E.U. already prevents companies like Sartori from selling cheese under names like Parmesan and Asiago.

“The European Union is promoting very aggressively on a global basis to protect these common names and really go against decades of trademark law,” said Wilson.

He said the dispute has been amplified by the current global trade environment. Sartori believes cheese makers should compete on a level playing field. May the best man win.

“My hope is that free trade will carry the day,” said Wilson.

That remains an open question in a part of the U.S. where tariffs are a particularly big deal.