The United States has new tariffs on imports of the European Union worth 11 billion US dollars following a decision this week. The escalation of tensions between the two blocs comes after the WTO has determined that European subsidies for Airbus would negatively impact US Boeing.
Price of olive oil
The United States threat of importing an import duty on olive oil could be important because the United States imports large quantities. Gary Howard, senior analyst at IEG Vu, said: “This case has been controversial for 14 years and the time has come to act.” Robert Lighthizer, US Representative: “The government is preparing to respond immediately.”
The European Union has criticized the United States, claiming that €11,000 million is a very excessive figure, and insists that the amount approved by the WTO can only be determined by the arbitrator appointed by it.
However, olive oil producers could be among the companies most affected, with more than a third of olive oil exports going to the US. The goods are still in arbitration and are not determined for several months. European olive oil producers, however, are preparing for pay increases between $ 0.034 and $ 0.176 per kilogram.
Spanish olive oil exports
According to Eurostat, 35% of European olive oil exports were destined for US ports in the first quarter of 2019, an estimated value of $339 million. Spain controls exports at 35,323 tonnes, closely followed by Italy at 30,898 tonnes. Portugal and Greece exported 1,410 tonnes and 3,506 tonnes, respectively. During the 2017/18 harvest, the EU exported 194,570 tonnes of approximately $ 1,000 million worth of olive oil to the United States.
Italy very concerned
Italy’s producers should be the hardest hit, according to Ettore Prandini, president of Coldiretti. Almost half of Italian olive oil exported in the first quarter of 2019 is destined for the United States. Last year, Italy exported the product to the US for $436 million. “This is to prevent a conflict between unprecedented and disturbing scenarios that could have a dangerous avalanche effect on the economy and the relations between the allied countries,” said Prandini.
Spanish and Greek manufacturers will also be affected. About a third and a half of its exports of olive oil are destined for the United States. Portugal and other US producers will be less worried as most of their olive oil is exported to other parts of the world, including Brazil and the Middle East.