Maybe, by the time you read this, the tariff wars will be over. Or maybe not. In that case, we’ll be pining for the good old days of $40 a pound French cheese. The on-again off-again import duties have cheesemakers, importers, distributors and retailers unable to make key business decisions. But as it stands now, we’re looking at a 20% tariff on cheeses from EU countries. Switzerland, inexplicably, got slapped with a 31% duty. Go figure. I checked in with importers, distributors and retailers about what this means, potentially, for consumers—and for their own businesses. It’s not pretty.
First thing to know: The exporting countries don’t pay the duty. The importers pay it. And they pass it on, says Stephanie Ciano, vice president of international purchasing for World’s Best Cheese, a major supplier to independent cheese shops in the U.S. “The American consumer will be paying the ‘extra,’” Ciano wrote in an angry Facebook post late last week. “When [Trump] says he expects to make 6 trillion dollars off of this, he means From You.”
Here's how imported cheese pricing typically works (with hypothetical numbers):
Let’s say a Gruyère costs the importer $10 a pound at the port of entry. A distributor pays $12 a pound for it and sells it to a retailer for close to $16 a pound. The retailer doubles that price, roughly, so the shopper pays $32 a pound. With a 31% tariff, that beautiful raw-milk Swiss cheese is now $43 a pound. For superb but little-known gems like Gourmino Goat, pictured above, such prices are very likely a deal breaker.
Will any of the players along that distribution chain absorb some of the cost increase?
Probably not, predicts Mark Roeland of CheeseLand, an importer of fine Dutch cheese. Every business in the distribution channel has high fixed costs, such as rent, labor, transportation, refrigeration and insurance. “I can’t operate at a 30 percent margin,” one retailer told me. “I need to be at 50 percent.”
“We will pass the increases to customers, absolutely,” says Gordon Edgar, cheese buyer for Rainbow Grocery in San Francisco. “Bottom line, I think, is that we will sell less cheese.”
Edgar worries that the tariffs will make even “gateway cheeses” unaffordable, handicapping his efforts to get people interested, eventually, in better cheese. “I can’t count the number of people who have gone from, for example, cheap French Brie to Taleggio to Red Hawk to Tulip Tree Foxglove in the span of weeks,” says Edgar. “That path won’t exist.”
Laura Downey, a Connecticut merchant, suspects that her customers might start taking their cheese dollars to the grocery store. They’ll still buy Parmigiano Reggiano and Manchego, but they’ll buy the nondescript supermarket brands rather than the Cravero Parmigiano Reggiano and farmstead Manchego 1605 that independent shops like hers—Greenwich Cheese Company and Fairfield Cheese Company—stock to lure shoppers who seek the best.
“Should I find a cheaper Manchego?” wonders Downey as she grapples with the potential fallout from tariffs. “But then I’m diluting what we do.”
Us versus them: Moses Sleeper (left) and Camembert
Conceivably, higher import prices could help domestic cheesemakers gain market share. American artisan cheese has long struggled to be price-competitive, although many European producers have hiked prices substantially in recent years.
“Maybe people will grumble less about American cheeses being so expensive,” says Alex Brown, who sells both domestic and imported cheeses for Gourmet Imports, a California distributor. If price-conscious shoppers replace an industrial French Brie with a fine American bloomy-rind cheese, that’s a net positive, argues Brown. But if they abandon artisan European cheeses, the pain will be felt from small farms in the Alps to small shops in Des Moines.
“Lost sales of European cheeses…will mean lost income for our retail and distribution partners,” says Andy Hatch, proprietor of Uplands Cheese in Wisconsin. “This is very worrisome.”
Hatch, who makes the award-winning Pleasant Ridge Reserve, says he will likely pause a creamery construction project that requires specialized cheesemaking equipment from Europe and construction materials from Canada. So much for tariffs helping American manufacturers.
The international artisan cheese world is remarkably congenial. Few view it as a zero-sum game. If domestic market share goes up but European dairy farmers, cheesemakers and distributors fail, we all lose.
Joe Salonia, the U.S. representative for Gourmino, a group of Swiss cheesemakers, has been puzzling over the President’s decidedly non-congenial approach. “It’s the behavior of someone who’s used to operating without the benefit of friendships, trust or collaboration in the business world,” says Salonia. “It’s frustrating and, frankly, hard to understand.”