Olive oil producers react to US tariffs
November 04, 2019
The North American Olive Oil Association (NAOOA) and 80 other US trade organisations have asked the US Trade Representative (USTR) to exempt tariffs on European products shipped before 2 October.
The NAOOA argued that a 25% tariff recently imposed on some Spanish olive oils, which came into force on 18 October, would impact prices of olive oil that left Spanish ports as early as mid-September, Olive Oil Times reported on 16 October.
“These new duties will not be borne by the EU producer or manufacturer of those now-dutiable goods, but by American importers which have already purchased the products and, very quickly, by American consumers,” the organisations said in a letter to USTR head Robert Lightheizer.
On 2 October, the USA announced tariffs on US$7.5bn worth of EU goods as a result of a 15-year long trade dispute over EU subsidies to European aerospace corporation firm Airbus, which the World Trade Organization ruled were improper. A 25% tariff was imposed on on Spanish virgin and non-virgin olive oil in all of its fractions in containers of less than 18kg.
The NAOOA and other signatories recommended exempting goods that left European ports prior to 2 October to mitigate the potential impact of the tariffs.
On 10 October, protestors in Madrid, Spain demanded aid for those struggling due to low olive oil prices. Government officials feared that Andalusia, one of Spain’s poorest regions, would be hit the hardest by the tariffs.
Andalusia was responsible for 80% of Spain’s olive oil production and was still suffering economic hardships from the 2008 financial crisis, with the unemployment rate still at 23% and youth unemployment at a staggering 40%, Olive Oil Times wrote.
The tariffs would directly impact 50,000 tonnes of Spanish olive oil exports to the USA, about 43% of annual exports, the head of olive oil for Andalusia’s coordinator of agriculture and livestock organisations, Cristobal Gallego estimated.
Extra virgin olive oil prices in Spain had fallen as a result of the impending tariffs, down 5% to €2.104/kg (US$2.310). Virgin olive oil prices and olive oil lampante prices also fell slightly, Olive Oil Times said.
Spain exported 115,000 tonnes of olive oil – worth about €400M (US$439M) – to the USA last year, making up slightly more than 35% of all US olive oil imports, according to data from the US Department of Commerce.