The European Union (EU) may impose retaliatory tariffs on the USA pending a decision from the World Trade Organization (WTO), Olive Oil Times reported on 12 June.

In a long-running dispute, the USA and the EU have accused each other of providing illegal subsidies to their respective aircraft manufacturers Boeing and Airbus.

The WTO ruled in October 2019 that the USA could impose US$7.5bn worth of tariffs on goods imported from the EU, including packaged Spanish olive oils and table olives from both Spain and France, as a result of its illegal subsidies to European aerospace corporation Airbus.

Meanwhile, in April the WTO had ruled in favour of the EU in its complaint about illegal US subsidies to US aerospace company Boeing and was waiting for confirmation from the bloc on what punitive measures it might take. The EU had published its own potential list of tariff targets but had made exceptions for goods that included olives and olive oil.

All four countries that had provided the illegal subsidies to Airbus – the UK, Germany, France and Spain – had been targeted by the tariffs but Spain’s agricultural sector had been hit particularly hard with olive oil exports to the USA plummeting.

Pressure had been mounting in Spain for the EU to either impose retaliatory tariffs on the USA or negotiate to remove olive oil from the list of tariffs, Olive Oil Times said.

“We are waiting to see the outcome of the Boeing panel,” EU Commissioner for Trade Phil Hogan told a press conference after an EU trade summit. “We will know this result in early July.

“Certainly in the absence of a negotiated settlement, there will be strong pressure by member states to ensure that the impact of this award will be implemented.”

However, Rafael Pico Lapuente, executive director of the Spanish Association of Olive Oil Exporting, Industry and Commerce (ASOLIVA), told Olive Oil Times he would prefer mediation to retaliation.

“Retaliatory measures are not good for anyone. I think that a negotiation should be started between the US and EU to remove these additional tariffs on Spanish olive oil, which are discriminatory and unfair.”

In February, the USA had decided not to increase the 25% tariff currently in place on Spanish olive oils but a lawyer for the United States Trade Representative (USTR) had warned that the organisation would reconsider if the EU imposed tariffs on US goods.