Europe Continues to Liberalize Imports While Export Uncertainty Grows

Summary

The U.S. threat­ened to impose a 17 per­cent tar­iff on E.U. agri­cul­tural imports, includ­ing olive oil, if a trade deal is not reached, while new data shows U.S. tar­iff rev­enue has increased four­fold over the past year, poten­tially impact­ing future trade nego­ti­a­tions. In response, the EFTA coun­tries have signed a deal to remove tar­iffs on imports from Mercosur coun­tries, poten­tially increas­ing com­pe­ti­tion with European olive oil pro­duc­ers in the Swiss mar­ket.

Shortly after the European Union said it would be ​“impos­si­ble” to meet the July 9^th dead­line set by the United States to com­plete a trade deal, the world’s largest econ­omy threat­ened to impose a 17 per­cent tar­iff on agri­cul­tural imports from the 27-mem­ber bloc, includ­ing olive oil.

E.U. exports to the U.S. cur­rently face a ten per­cent tar­iff imposed in April, which could rise to the orig­i­nal rate of 20 per­cent. U.S. President Donald J. Trump had pre­vi­ously threat­ened Europe with 50 per­cent tar­iffs if a deal was not reached. 

New data show­ing U.S. tar­iff rev­enue increased four­fold over the past year, with trade vol­umes declin­ing by 25 per­cent from March 2025 to April, when the tar­iffs were imple­mented, are expected to buoy the admin­is­tra­tion’s con­fi­dence in the pol­icy and lower the chances of a détente.

While pro­duc­ers from around the olive oil world have told Olive Oil Times that con­sumer prices are unlikely to rise before the start of the next har­vest, the uncer­tainty of what tar­iffs will be when the first Northern Hemisphere olive oil is pro­duced in October makes it impos­si­ble to plan for the future. 

Producers have not ruled out rais­ing prices to cover the cost of the tar­iff or divert­ing prod­ucts away from the U.S. to other mar­kets.

“The prob­lem is uncer­tainty, because the U.S. gov­ern­ment has already given at least four ver­sions of what the pol­icy will be, and so far it has not applied any,” said Juan Vilar, the chief exec­u­tive of Vilcon, a strate­gic con­sul­tancy in the olive oil sec­tor. ​“The first thing we need is cer­tainty before we deter­mine what the impact will be.”

Meanwhile, the four European coun­tries that com­prise the European Free Trade Agreement – Iceland, Liechtenstein, Norway and Switzerland – have signed a deal to remove tar­iffs on imports from the four South American coun­tries that make up Mercosur, which includes Argentina, Brazil, Paraguay and Uruguay. 

According to World Bank trade data, Switzerland imported 126 kilo­grams of vir­gin and extra vir­gin olive oil val­ued at $1,260 (€1,165) from Argentina and five kilo­grams of vir­gin and extra vir­gin olive oil val­ued at $800 (€740) from Uruguay in 2023. 

The deal is expected to remove tar­iffs applied to olive oil imports by Swiss author­i­ties, osten­si­bly paving the way for South American exporters to com­pete with European pro­duc­ers that already enjoy free trade access to the Swiss mar­ket.

Overall, the data show the three largest EFTA mem­bers com­bined to import 16.9 mil­lion kilo­grams of vir­gin and extra vir­gin olive oil val­ued at $144 (€133) mil­lion in 2023. 

However, there were no olive oil exports from the Mercosur coun­tries to Norway or Iceland, as these coun­tries do not cur­rently apply tar­iffs on vir­gin and extra vir­gin olive oil imports from Argentina and Uruguay. No trade data for Liechtenstein, the sev­enth small­est coun­try in the world by pop­u­la­tion, were avail­able for analy­sis.

The EFTA-Mercosur trade deal comes shortly after the E.U. and Chile signed a free trade agree­ment, remov­ing tar­iffs on Chilean olive oil imports. Meanwhile, the E.U. and Mercosur trade deal awaits rat­i­fi­ca­tion by E.U. cap­i­tals.

The raft of trade deals paves the way for more exports from South America, the largest olive oil-pro­duc­ing region out­side the Mediterranean Basin, to Europe at a time when European exporters are deal­ing with the uncer­tainty cre­ated by U.S. tar­iffs, with lim­ited alter­na­tives. 

“The United States is our biggest mar­ket,” said Manuel Norte Santo, the export man­ager of the Portuguese pro­ducer and exporter Est. Manual Silva Torrado. ​“It’s very com­pli­cated to pre­dict what will hap­pen. We’ve been talk­ing with our clients, and they told us that we need to wait a few months to under­stand what will hap­pen since the Trump admin­is­tra­tion is very volatile.”

• FT
• EFTA