Spain's olive oil traders doubt Trump tariffs will stop Americans guzzling their liquid gold
Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.
Spanish olive oil traders don't like Donald Trump's tariffs, but they still take comfort knowing their biggest competitors have been hit just as hard, or even harder.
As of last Thursday, EU agri-food exports to the US are subject to a 15% blanket tariff under the controversial 'biggest trade deal ever' agreed between Brussels and Washington. Among those products subject to fresh levies are EU olive oil exports, of which the US absorbs around a third.
For Spain, which makes up 70% of the EU's production, what's at stake is their biggest export to America.
As trade tensions simmer again, the country's traders in what's sometimes called liquid gold are looking on the bright side. 'There are other countries with worse luck than us,' said Rafael Pico Acevedo, deputy director at ASOLIVA, which represents Spanish olive oil producers and exporters.
During a previous trade row between Brussels and Washington in 2019, Spanish producers were put at a disadvantage compared to their neighbours, with Italy temporarily re-gaining the top spot as the leading EU exporter to the US.
This time around, Spain's other EU competitors in the market – mainly Italy and Greece – face the same 15% blanket tariff, while Tunisia, the bloc's main external rival in the olive oil market, is grappling with a 25% US tariff.
Meanwhile, Turkey, another key producer, has also been hit with a 15%.
Others have fared better, but have less market power. 'We just have a 5% difference [in tariffs of] the most favoured countries, which are not the leaders,' Pico told Euractiv, pointing to Morocco, Australia, Argentina and Chile.
Still, Pico insisted that it is very difficult to make predictions and warns that the rules of the game when it comes to olive oil have changed. '[Countries] can now position themselves ahead of us due to political decisions,' he said. Pico slammed Trump's reasoning for the ramped up tariffs. For him, trade barriers will not support the US olive oil industry, as Trump promised, but mostly just raise prices at the checkout.
'The US is not going to promote American olive oil because it barely has any', he said, adding that the country only covers 2% of its demand.
Pico warned that, confronted with higher prices, US consumers might switch from olive oil to cheaper alternatives, such as palm oil, to season their dishes. But he remains confident in olive oil's appeal across the Atlantic.
'When we've had price hikes almost twice as hard, the US market has resisted – even better than the Spanish,' he said, referring to last year's historic jumps in the price of olive oil.
As Spanish consumers make headlines for swapping their beloved olive oil for the less glamorous sunflower oil, US consumption stayed steadier.
'The US consumer has shown a lot of olive oil culture,' said Pico. After the massive price highs in the two previous seasons, caused by historically low production, olive oil prices stabilised this year.
Things also look promising for the harvest starting in October, perhaps even too bountiful.
With forecasts pointing to a record season after heavy rainfalls in March and April, the Spanish government began preparing measures to tackle a potential surplus and prevent prices from plummeting.
However, a recent drought and soaring temperatures has dampened expectations.
'It looked like the harvest of the century, we were expecting 2 million tonnes (...) but that is fading away,' said Pico.
(jp)
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