Trump's tariffs raise costs for stores and restaurants that import Italian pasta

Key Concepts

• Intangible Cultural Heritage (UNESCO): A designation by the United Nations Educational, Scientific and Cultural Organization to protect cultural practices, expressions, knowledge, and skills that communities, groups, and individuals recognize as part of their cultural heritage. Italian cuisine recently received this honor.
• Tariff: A tax or duty to be paid on a particular class of imports or exports. The U.S. Department of Commerce announced significant tariffs on Italian pasta.
• Dumping: In international trade, dumping occurs when a country or company exports a product at a price lower than its domestic price or cost of production. The U.S. government alleges Italian pasta makers are engaging in dumping.
• Predatory Pricing: The practice of setting prices low to eliminate competition. This is a key aspect of the dumping accusation.
• Market Share: The percentage of total sales in an industry generated by a particular company. Stable market share is cited as evidence against predatory pricing.
• Unione Italiana Food: A major trade group representing Italian food producers, including pasta makers.

The Impending Tariffs on Italian Pasta

Italian cuisine recently achieved a new honor, becoming the first gastronomic style recognized as Intangible Cultural Heritage by UNESCO. However, this recognition comes amidst a significant threat to a core component of Italian cuisine in the U.S.: pasta from Italy. The U.S. Department of Commerce announced that, as early as January, pasta from 13 major Italian producers will face a 92 percent tariff on top of the existing 15 percent tariff on all goods from Europe, resulting in a total tariff of nearly 107 percent. These tariffs are currently preliminary and are expected to be finalized by January 2nd.

Impact on U.S. Businesses and Consumers

The announcement has caused considerable concern and preparation among U.S. businesses and consumers.

• Vace (Washington D.C. & Bethesda, MD): Diana Calcagno, manager of Vace, an Italian grocer and deli founded almost 50 years ago, expressed deep concern. She described the news as giving her "goose bumps" and highlighted the uncertainty about whether customers would be willing to pay the drastically increased prices. Vace is stocking up on staples like spaghetti, bucatini, and orecchiette, and customers are already inquiring about the availability of Italian pasta. Calcagno noted that suppliers are already raising prices even before the tariffs officially kick in, leading to customer complaints and fears of reduced sales, especially for non-essential items like a "$25 bottle of wine."
• A. Litteri (Northeast Washington D.C.): Max Evans, owner of this small Italian grocer, reported an immediate surge in demand. He stated, "Saturday was the first day ever that reminded me of the pandemic. It was the same thing where I just -- I looked at the shelves halfway through the day and I could not believe how much we had sold of just pasta." Evans is ordering more supply to meet this demand, emphasizing that "Italian pasta, it's like Italian wine. It's specific to the region where it's produced. There's such a vast array. I mean, I don't think you're going to find that from American producers in the kind of numbers and availability."
• Consumer Frustration: Customers expressed frustration over the news, especially after years of rising food prices. One woman stated, "I don't know, it just doesn't seem very fair," while a man added, "Not to be able to buy pasta is really terrible, because pasta is a very primary food that everybody should access." Another customer lamented, "Italian pasta, particularly Italian pasta here, is the best in the city. And the fact that it's getting tariffed that much, A, is going to disincentivize people from coming. But then, B, it's just like, why are we doing nonsense? Like, so it's just ridiculous."

Economic and Political Arguments

The U.S. government's rationale for the tariffs is that Italian pasta makers are dumping their product at unfair prices in the American market. However, this claim is strongly contested.

• Chiara Donegani's Research: Chiara Donegani, a researcher and professor at Aston University in the U.K. and co-author of an article titled "The Great Pasta War," has found no evidence to support the dumping allegations. She states, "The Italian pasta sold to the U.S., it is usually priced higher, not lower." Furthermore, she points to the stability of Italian companies' market share, noting, "Italian companies' market share are broadly stable over that period, with no sign of predatory pricing to squeeze out competitors." Donegani emphasizes the fundamental nature of pasta, stating, "Pasta is not a strategic product. Pasta is a basic product. It's the iconic symbol of the Mediterranean diet." She views the tariffs as a form of political pressure, asserting, "It exerts political pressure and basically it signals that no sector is safe."

Italian Producers' Perspective

Margherita Mastromauro, president of the pasta makers sector of Unione Italiana Food, a trade group, highlighted the severe economic consequences for Italian producers.

• Economic Impact: She stated that "The United States imports approximately 300,000 tons of Italian pasta, worth around $700 million." Mastromauro warned that "The duty would essentially mean a halt to imports of this pasta into the American market, because, obviously, it would mean that the price of pasta would more than double, making it completely unprofitable and uncompetitive." This suggests a potentially fatal blow, especially for small and medium-sized Italian producers.

Market Dynamics and Consumer Behavior

While Italian pasta only constitutes about 12 percent of the U.S. market, its cultural significance and perceived quality are high. The tariffs are expected to significantly alter consumer choices and market availability. Grocers like Vace and A. Litteri are already observing shifts in customer behavior, with increased panic buying and complaints about rising prices. The unique regional varieties and quality of Italian pasta, as highlighted by Max Evans, are difficult to replicate by American producers, suggesting a potential loss of diversity and quality for U.S. consumers.

Conclusion

The impending U.S. tariffs on Italian pasta represent a significant challenge to both American businesses and consumers, as well as Italian producers. Despite Italian cuisine's recent UNESCO recognition, the proposed 107 percent tariff threatens to more than double the price of imported Italian pasta, potentially halting its entry into the U.S. market. While the U.S. government cites dumping as the reason, academic research refutes this, suggesting the tariffs may be a form of political pressure. The move is causing widespread frustration, panic buying, and concerns about the accessibility and affordability of a culturally significant and basic food product. Businesses are bracing for significant operational changes and potential customer loss, while Italian producers face the prospect of losing a major export market worth $700 million annually.