Jeff Schwager, president of Sartori Foods in Plymouth, Wisconsin, believes Trump should address international trade imbalance.
But not with allies like Canada and Mexico. China is the issue, he said.
“I would rather take the approach of, let’s get Canada, let’s get Mexico, let’s get Europe, and let’s collectively deal with the China situation instead of us creating this havoc with our allies,” he said.
That ‘havoc’ has profound effects on his cheese company, his 500 employees and the 700 Wisconsin farming families that produce the milk used in Sartori cheese.
“It’s 1,200 families that are counting on us to make the right decision and provide for their livelihoods,” Schwager said.
Schwager appeared on a recent episode of Sunday political talk show “UpFront with Mike Gousha,” to repeat his plea that President Trump reconsider his steel and aluminium tariffs so that cheesemakers and dairy farmers across the state don’t suffer.
After Trump announced tariffs on steel and aluminum, countries around the world responded with retaliatory tariffs on products like Harley-Davidson motorcycles, ginseng and cheese. That’s put Wisconsin companies “in the crosshairs of an international trade dispute,” said host Mike Gousha.
Citing those retaliatory tariffs, Harley-Davidson has decided to move some production to Europe, a move Trump has repeatedly denounced.
"Harley-Davidson, please build those beautiful motorcycles in the USA, OK? Don’t get cute with us. Don’t get cute," he told the crowd at the Foxconn factory groundbreaking in Mount Pleasant last week.
Harley-Davidson isn’t the only Wisconsin company that says the tariffs are hurting business. Sartori is facing steep tariffs on cheese from countries like Mexico, which imposed a 15 percent tariff that next week will increase to between 20 and 25 percent depending on the type of cheese, Schwager said.
In the short term, Sartori has negotiated with customers in Mexico to split the tariff, turning a once-profitable transaction into “maybe break even,” Schwager said. That’s only a 90-day agreement, in the hopes that the company will be able to re-evaluate the deal.
The problem isn't limited to Sartori; wholesale cheese and butter prices have already declined, the Milwaukee Journal-Sentinel reported.
Sartori currently ships to 49 different countries, and exports make up a little over 10 percent of sales, Schwager said. The company had planned to increase exports to 30 percent of their sales over 5 years, but now there’s a possibility that “won’t happen and we’ll have to totally re-plan the business,” he said.
Cheese production is tricky, because it needs to be aged, Schwager said,. The product they’re currently shipping was made a year ago, when they “didn’t know what the trade rules were going to be.”
Plus, 90 percent of milk from Wisconsin cows goes toward making cheese, Sartori said. Milk prices have already been low for three years, and if Wisconsin companies have to cut back on cheese production, there will be an oversupply of milk, causing milk prices to further decrease.
“Unfortunately, if they go down much further, you’re going to end up with a number of dairy farms that aren’t going to be able to exist,” he said.
“We are looking at a short-term washout of 20 percent of Wisconsin dairy farm milk income on a monthly basis. That’s how dangerous this mess is,” Pete Hardin, publisher of The Milkweed, told the Journal-Sentinel. “However you want to extrapolate the wider economic impact of a $75 million a month drop in Wisconsin dairy farm revenue, it’s painful.”
Schwager urged Trump to finalize long-term trade agreements, pointing out that Europe has already negotiated agreements with Canada and Mexico, a move that gives European cheesemakers a competitive advantage, the New York Times reported.