Steel: 50 percent. Copper: 50 percent. Cars: up to 25 percent. Now an even bigger Trump-era levy looms: 107 percent on Italian pasta.
Mamma mia.
It started with the US Department of Commerce launching what it says was a routine antidumping review, based on allegations Italian pasta makers sold product into the US at below-market prices and undercut local competitors. That has led to a threat of 92 percent duties, which would come on top of the 15 percent tariff US President Donald Trump’s administration imposed on European exports generally.
Photo: Getty Images via AFP
The news sent shockwaves through Italy, where 13 producers would be subject to the whopping one-two punch. They say sales in their second biggest export market would shrivel if prices to US consumers more than double.
While the measure would hardly prompt pasta shortages, it still has perplexed importers like Sal Auriemma, whose shop in Philadelphia’s Italian market, Claudio Specialty Food, has been operating for more than 60 years.
“Pasta is a pretty small sector to pick on. I mean, there’s a lot bigger things to pick on,” said Auriemma, pointing to luxury items as an alternative.
“It’s basic food,” he said. “Something’s got to be sacred.”
Italy is a nation of avid pasta eaters. Less known is that most of the tortellini, spaghetti and rigatoni its factories churn out gets sent abroad. The US accounts for about 15 percent of its 4 billion euros (US$4.65 billion) in exports, making it Italy’s largest market after Germany, data from farmers’ association Coldiretti show.
The punitive pasta premium has become a cause celebre for Italy’s politicians, executives and economists. Italian Minister of Agriculture Francesco Lollobrigida last month told lawmakers that the government was working with the European Commission and engaging in diplomatic efforts, while supporting the companies’ legal actions to oppose US sanctions.
EU Trade Commissioner Maros Sefcovic addressed reporters in Rome last month, stressing the lack of evidence backing the US decision and calling the combined 107 percent levy “unacceptable.”
Margherita Mastromauro, president of the pasta makers sector of Unione Italiana Food, told The Associated Press that prices for Italian pasta in the US remain high, and certainly higher than US-made rivals — undermining any dumping claim.
The measures could deal a fatal blow to small and medium-sized producers, she said.
Lucio Miranda, president of consultancy group Export USA, agreed.
“A duty rate of 107 percent would definitely kill this flow of export,” Miranda, who is Italian, said by phone from New York. “It’s not going to be something that you can just dump on the consumer and move on, life continues. It will definitely be a deal killer.”
The Commerce Department’s investigation started last year after complaints from Missouri-based 8th Avenue Food & Provisions, which owns pasta brand Ronzoni, and Illinois-based Winland Foods.
The office’s review focused on La Molisana and Garofalo, chosen as primary respondents because they are Italy’s two largest exporters, the department said in an e-mailed statement.
Any sale price below either producers’ costs or the price they charge in the Italian market would be considered dumping, in line with numerous other reviews of Italian pasta since 1996, it said.
The two companies presented information incorrectly or withheld it, significantly impeding analysis, according to the department.
In the face of these alleged deficiencies, the office presented its 92 percent duty estimate, which it extended to 11 other companies based on an assumption the two companies’ behavior was representative.
“After they screwed up their initial responses, the Commerce Department explained to them what the problems were and asked them to fix those problems; they didn’t,” White House spokesperson Kush Desai wrote in an e-mail. “And then Commerce communicated the requirements again, and they didn’t answer for a third time.”
La Molisana declined to comment when contacted by the AP. Garofalo did not respond to a request for comment.
The sanctions would be applied not just to imports going forward, but also the 12 months through June last year, the department said, adding that only 16 percent of total Italian pasta imports would be affected.
Its final decision is scheduled for Jan. 2, which could be extended by 60 days.
A little over an hour’s drive northeast from Naples is Benevento, a sleepy hilltop town of 55,000 people famed for its ancient Roman theater and Aglianico red wine. It is also home to Pasta Rummo, founded in 1846, which prides itself on its seven-phase, “slow work” production method.
CEO Cosimo Rummo is outraged by the threat to his company’s annual 20 million euros in exports to the US.
“These tariffs are completely senseless,” Rummo said in a phone interview. “These are fast-moving consumer goods … Who would ever buy a pack of pasta that costs 10 dollars, the same price as a bottle of wine?”
He added that he has no intention to start producing pasta in the US, as some companies have done and so would be spared the prospective levy. That includes Barilla, which for decades has been the main Italian pasta brand in the US and now has large-scale production facilities there.
When the transatlantic imbroglio started simmering, Robert Tramonte of Arlington, Virginia sought assurances. The owner of The Italian Store called his supplier, who told him there is enough pasta inventory stocked in the warehouse to keep prices steady until Easter.
Tramonte’s clients count on him for top-shelf product and he was relieved that, at least for the time being, they would not have to shell out for the real deal. Or worse — purchase made-in-the-US pasta.
“They’ve tried to make Italian products and use the same ingredients, but the source wasn’t Italy,” he said. “And they just didn’t taste the same.”
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