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From tomorrow, the US will apply tariffs of 25% to most EU dairy products in retaliation against EU Airbus subsidies. Cheese is the largest EU dairy export to the US and under the new tariff schedule, 75% of EU cheese sent to the US will be subject to tariffs. Italy is the largest exporter of cheese to the US, accounting for nearly 20% of all cheese imported by the US. Almost all Italian cheese exported to the US will be subject to the new duties. France is also a big exporter of cheese to the US, with 24,000t exported last year. France has been omitted from a selection of cheese tariffs, including Cheddar, Emmental and blue-veined cheeses although tariffs will apply to 96% of French cheese exports to the US. Significant volumes of butter are exported to the US with Ireland accounting for nearly half of all US butter imports. Under the new tariff schedule, all of Ireland’s butter exports will be subject to the new tariffs. All UK butter and cheese exports to the US are covered by the new tariffs.
The WTO have authorised tariffs on US$7.5bn of imports into the US from the EU, citing the EU’s subsidies to Airbus. A 25% tariff will be imposed on agricultural goods from France, Germany, Spain and the UK as part of effort to force Brussels to abandon the subsidies. European dairy exports that will now face higher tariffs include all milk and cheese categories, WPC, butter and dairy spreads, other dairy fats and oils, and yogurt. The Trump administration is expected move swiftly to implement these tariffs. The European Dairy Association said in a statement that the EU dairy industry should not be made to pay for problems in the aircraft sector, or even be part of the discussions. “Agri-food products and hence the farming community are now regularly taken as hostages in trade disputes.” Under the current tariff lines, the US import tariffs on EU cheese alone amounted to around US$100m last year, EDA said. “We also question the legality of the differentiation between EU Member States in the US retaliation tariff list. The EU and the European ‘lactosphère’ must be treated as a single unity in WTO terms.”