Currency Wars & A Pepperoni Problem : Planet Money Listener questions! How the U.S.-China trade war has escalated, including a move by China to devalue its currency. Plus the history of pepperoni on pizza.
NPR logo

Currency Wars & A Pepperoni Problem

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Currency Wars & A Pepperoni Problem

Currency Wars & A Pepperoni Problem

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript



Hey, everyone. This is THE INDICATOR FROM PLANET MONEY. I'm Cardiff Garcia. Stacey Vanek Smith, my co-host, is away for a couple of months writing a book, so filling in today is producer Darius Rafieyan, here with me now to answer some listener question. Darius, how excited are you right now?


Oh, I'm stoked.

GARCIA: OK, well, only two questions on today's episode. The first is about why China has just devalued its currency against the U.S. dollar and the second - how much of the overall stock of pepperoni ends up on pizza? The answers coming up right after the break.

OK, everyone, let's get right to it. The first question is about China and the trade war. We're going to play that question. I'm going to answer it, and then Darius is going to kind of play the role of follow-up questioner on behalf of our listeners.

RAFIEYAN: I will be the audience stand-in.

GARCIA: Let's do it.

ANDY: Hi, INDICATOR. This is Andy (ph) in Chapel Hill. What's happening in a practical sense when China allows its currency to slip? How does China benefit from this exchange rate? And how does it harm the U.S.?

GARCIA: OK, so a bit of context here to start. Last week, President Trump said that the U.S. would impose tariffs on $300 billion of goods that the U.S. buys from China. These are goods that did not previously have tariffs imposed on them. In retaliation, China has done two things. First, it said that it will temporarily at least suspend the purchase of U.S. agricultural products. So farmers in the U.S. are going to be hurt by this. But second, it has allowed its own currency to depreciate against the dollar. The Chinese currency is called the yuan.

Now, let's go through the mechanics of how this works. When the U.S. imposes tariffs on goods that the U.S. buys from China, it essentially is raising the cost of those Chinese goods for the people and businesses in the U.S. that buy them. So when the Chinese government responds by lowering the value of its currency, it is offsetting the impact of those tariffs. Why? Because if you are in America, you can buy more Chinese products when the Chinese currency is lower. So it effectively offsets the impact of the tariffs.

RAFIEYAN: When we say that China has weakened its currency, does that mean they just put up a sign that says the currency exchange rate is now this? Or do they have to actually go out and buy a bunch of dollars with yuan to make that happen?

GARCIA: So it's actually not that much more difficult for the Chinese government to devalue its currency than to put up a sign that says so, in part because market forces are actually trying to devalue the Chinese currency right now. Essentially, what the Chinese government had been doing was to prop up its currency by buying more of its own currency with the reserves of U.S. dollars that the government had. And essentially, to let the Chinese currency depreciate, all the Chinese government has to do is a little bit less of that intervention. And that's exactly what it's been doing. The U.S. government obviously doesn't like it, which is why the president is now threatening to escalate this further, including by having taken the step of labeling China a currency manipulator.

RAFIEYAN: Didn't the U.S. Treasury just, like, a few months ago decide that China was not a currency manipulator?

GARCIA: It did. So here's the deal. A country has to meet certain criteria in order to be labeled a currency manipulator by the U.S. Treasury Department. There was a long stretch of time from about 2003 to 2013 when China did in fact meet those criteria of currency manipulation. OK. For political reasons or for expediency reasons, the U.S. still declined to label China a currency manipulator. But here's the thing - ever since 2013, OK, China has not been a currency manipulator. It has not met those criteria, and it still doesn't, but the Treasury Department is now deciding to label China a currency manipulator clearly in response to China's escalation of the trade war.

RAFIEYAN: So this is really just policymakers being petty.

GARCIA: I mean, it's policymakers playing politics is what it is. All right. Let's go to the next question.

CHRISTY: Hi, this is Christy (ph) from Pittsburgh, Pa. And I have a question today about pepperoni. I was eating a piece of pizza with pepperoni on it, and I realized that most of the pepperoni I ever eat is only done so as a pizza topping. So I was wondering what percentage of pepperoni in the United States is consumed as a pizza topping as opposed to any other way.

GARCIA: This is maybe my favorite listener question ever.

RAFIEYAN: Yeah. When we got this one in the inbox, I was very excited, just really steeped myself in Italian meats for a few weeks. And to help us answer this question, I talked to Anthony Panichelli, who is the pizza toppings brand manager at Hormel Foodservices.

ANTHONY PANICHELLI: I've been more or less obsessed with pizza for the last four or five years.

RAFIEYAN: Anthony is a big pizza enthusiast, and he decided to help me try to answer this question. And it's surprisingly a difficult question because we don't have great data on exactly how much pizza gets produced and how much pepperoni gets produced. But he decided to help us kind of figure it out.

PANICHELLI: There's 3 billion pizzas eaten by people in the United States every year. And so if you take the idea that 36% of pizzas that are made have pepperoni on them, then you get about 1.08 billion pizzas with pepperoni on it per year.

RAFIEYAN: OK. About 1 billion - a little over 1 billion pepperoni pizzas eaten in America every year. Then on the pepperoni side, we produce, Anthony thinks, about 414 million pounds of pepperoni every year.

PANICHELLI: So let's say there's 414 million pounds of pepperoni produced a year. People are putting on average of 50 slices of pepperoni per pie, right? That would be about 54 billion slices of pepperoni being used per year. And so if you divide that by the total, the 414 million pounds, you get about 51% of all pepperoni produced in United States ends up on a pizza, which I think would be kind of shocking for some people.

RAFIEYAN: I found that very shocking. It's only about half of pepperoni that actually ends up on a pizza.

GARCIA: Here's a question I have, though. Does that include calzones?

RAFIEYAN: He did not include calzones in that number. He put calzones in a separate category, which I think we may get some people writing in that they say a calzone is actually a pizza.


RAFIEYAN: But the thing I found interesting is that Hormel sells a lot of pepperoni for use in salads - pasta salads, regular salads. A surprising number of people eat pepperoni by itself just as a snack, as just sort of a high-protein snack. Apparently, a huge chunk of their pepperoni goes to West Virginia for their pepperoni rolls, which is something I was unfamiliar with but is apparently the pride of West Virginia. So basically a huge chunk of pepperoni goes places other than pizza. But here's the thing - while I was on this pepperoni journey, I learned a lot of interesting things about pepperoni. For example, it's not Italian.

GARCIA: Pepperoni is not Italian.

RAFIEYAN: Not Italian at all. Basically, pepperoni first starts to emerge in the early 20th century around the nineteen-teens, 1920s. And it was essentially Italian American immigrants who were trying to replicate the sausage that they had in Calabria and Apulia, which was known for its distinctive red color, with what they could get on the Lower East Side of New York. So it is this distinctly American thing. And the funny thing that Anthony told me is that now we actually export pepperoni back to Italy. So it is something that has become an American thing that is now going to Italy.

GARCIA: So it wasn't originally Italian.

RAFIEYAN: Yeah. And the last fun thing I learned about pepperoni is that it is actually very important in the development of the pizzeria as we know it because pepperoni by definition it has to have a moisture ratio that makes its shelf stable. So, for example, Hormel's pepperoni can last on the shelf for up to 180 days, almost half a year, as opposed to, say, sausage, the second most popular pizza topping, which goes bad in a week. And so the fact that you can buy pepperoni in bulk for very cheap and keep it in your fridge or on your shelf at your pizzeria for months is what contributes to making pizzerias such a high-margin business. They have one of the highest margins in the restaurant industry. And so that, Anthony thinks, is part of the reason why pepperoni has become the most popular pizza topping. It's just very practical.

GARCIA: The practical application of pepperoni, along with a brief history - only on THE INDICATOR, folks. What other podcasts will answer a question about the U.S.-China trade war, the history and uses of the pepperoni on a pizza? I defy you to find another.

RAFIEYAN: So if you have any questions about foreign exchange and/or Italian meats, you know where to go.

GARCIA: - keep sending us your questions. This episode of THE INDICATOR was produced by Rachel Cohn, fact-checked by Emily Lang, edited by Paddy Hirsch. And THE INDICATOR is a production of NPR.

Copyright © 2019 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.