As managing director of the Yarmouth-based Rogers Collection, an importer of gourmet foods, Carrie Blakeman placed a large order in September for a particular type of olive oil produced in the Andalusian region of Spain.
Last month, 20 pallets of Nunez de Prado finally arrived at the Rogers warehouse in New Jersey. In addition to paying for shipping costs, duty fees and the olive oil itself, Rogers also had to pay a 25 percent tariff imposed by the Trump administration that took effect Oct. 18.
The tariff, essentially a tax paid to the federal government, was the latest escalation of a trade dispute triggered by a 2004 U.S. complaint to the World Trade Organization about unfair subsidies to European aircraft manufacturer Airbus. It cost her company $35,000.
“It’s painful,” Blakeman said. “They actually set this up as one of the most difficult tariffs. Every 180 days they can decide on an entirely new set of products, and they can decide to bring it up to 100 percent. The next 180-day revolving cycle is coming up (in August). It doesn’t give us time to plan.”
Combined with the economic shock waves created by the global coronavirus pandemic, tariffs are putting a double whammy on Maine food and wine dealers, many of whom, along with restaurants, banded together to ask their congressional representatives for help.
“In the months leading up to the coronavirus crisis, we did everything in our power not to pass along the extra costs of these duties to consumers,” reads a letter to U.S. Sen. Susan Collins, R-Maine, from 31 Maine culinary business owners dated April 27. “We were surviving, but at the expense of our cash flow and reserves, crushing our creditworthiness right before we would need it most. Demand for specialty food has plummeted in recent weeks, but the 25 percent additional and entirely discretionary tariff remains. Importers and distributors now have months’ worth of product, much of it perishable, in storage and in transit and no horizon for when customers might return.”
Last week, Collins and Sen. Angus King, I-Maine, responded with a letter – also signed by Sen. Kelly Loeffler, R-Georgia – to Treasury Secretary Steven Mnuchin requesting at least a temporary reprieve for companies faced with the tariffs.
The letter notes that Mnuchin received emergency authority in an April 19 executive order issued by President Trump allowing for “the temporary extension of deadlines for payment of certain duties, taxes, and fees.”
In a joint statement from Collins and King earlier this week, the senators urged Mnuchin to adjust the deferral process to provide broad relief as soon as possible. In late March, Collins wrote to Mnuchin along similar lines, asking for temporary deferral of tariffs for U.S. companies already having trouble because of the pandemic.
As grocery prices jumped 2.6 percent from March to April – their biggest monthly increase in 50 years – an additional 25 percent tax, not just on olive oil and imported wines but on staples such as cheese, yogurt, frozen fruit and pork, will drive up costs for consumers and result in fewer options for consumers, the Maine business owners said.
Mary Allen Lindemann, co-founder of Portland-based Coffee By Design, said the beans she imports from two dozen countries are not currently affected by the tariffs on European Union products, but that her business does not exist in isolation. It is part of Portland’s celebrated food culture.
“Yes, these are products from away, but they have become staples of the cuisine here in Maine,” Lindemann said. “It hurts someone in another country. It hurts businesses here who relied on this product. As a consumer, I have fewer choices.”
She said that if restaurants can’t reopen, Coffee By Design won’t be able to continue its wholesale business. With the reopening Wednesday of its India Street location, the local coffee house chain has four shops offering curbside sales, but Lindemann said she still had to lay off 30 people.
“The trickle-down is pretty deep,” she said of the tariffs’ effect. “The other side is that I feel we are becoming this island nation and cutting ourselves off from the rest of the world. In hurting other countries, we do not benefit.”
The European Union followed up on the original 2004 U.S. complaint about Airbus subsidies with one of its own about Boeing, and the World Trade Organization found that the world’s two largest aircraft makers both received billions in unfair subsidies. The WTO announced in October the extent ($7.5 billion) the U.S. was allowed to retaliate. Another announcement about EU countermeasures is expected in the coming weeks, according to Roger Murry, a lawyer based in Washington, D.C., who represents the North American Olive Oil Association.
“From the perspective of those hit by tariffs, we want both sides to be motivated to conclude this thing and move on,” Murry said. “I think we’re apprehensive that this will just drag on because there are bigger problems. (Tariffs) really do hurt a lot of people, but there’s so much else going on that it’s easy to see how they could be forgotten about.”
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