Trump's Days in Power Are Numbered, But His Tariffs May Endure

While European exporters are optimistic that the Biden administration will reset trading relations, the effects on the domestic olive oil sector remains to be seen.
President-Elect Joseph R. Biden Jr.
Nov. 17, 2020
Daniel Dawson

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President-Elect Joseph R. Biden Jr. will not take office until noon on January 20, how­ever that has not stopped the for­mer vice pres­i­dent from let­ting his pri­or­i­ties be known.

We all agree that we want to get the econ­omy back on track,” he said in a tele­vised speech ear­lier this week. We need our work­ers to be back on the job by get­ting the virus under control.”

Things are not going to get worse. Theoretically, with Biden, we now have a bet­ter chance of reduc­ing tar­iffs.- Antonio de Mora, sec­re­tary gen­eral, Asemesa

Beyond com­bat­ing the spread of the COVID-19 pan­demic and reviv­ing the U.S. econ­omy, Biden has also pledged to tackle cli­mate change, which endures as a top con­cern for olive oil pro­duc­ers around the world.

Kimberly Houlding of the American Olive Oil Producers Association (AOOPA) told Olive Oil Times, AAOPA under­stands cli­mate change will be a pri­or­ity for President-Elect Biden, which is expected to impact the administration’s nat­ural resources pol­icy, espe­cially as it relates to water, land use and Endangered Species Act – issues that are impor­tant to agri­cul­ture production.”

See Also: Goya CEO Faces Backlash for Praising Trump

Olive trees are drought tol­er­ant, do well on lower qual­ity soil and require few inputs,” Houlding added. Therefore, we could see an expan­sion of olive oil pro­duc­tion as farm­ers look to diver­sify their farm­ing portfolios.”

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Beyond the issue of cli­mate change, Houlding said that how the Biden admin­is­tra­tion will impact U.S. olive oil pro­duc­ers would be deter­mined by his cab­i­net selections.

Meanwhile, on the other side of the Atlantic, there is opti­mism that Biden will reset trad­ing rela­tions with the European Union. 

Many olive oil and table olive pro­duc­ers in Spain are hope­ful that the new pres­i­dent will not impose any new tar­iffs on E.U. goods and will work to undo those imposed by the Trump admin­is­tra­tion.

See Also: Tariffs

Things are not going to get worse,” Antonio de Mora, the sec­re­tary gen­eral of the Spanish Association of Exporters and Industrialists of Table Olives (Asemesa), told Hoy. Theoretically, with Biden, we now have a bet­ter chance of reduc­ing tariffs.”

Currently, Spanish black olive imports face a 35 per­cent duty, which came into force after the U.S. Trade Representative and U.S. Commerce Department accused Spanish olive pro­duc­ers of vio­lat­ing anti-sub­sidy and anti-dump­ing laws.

Four dif­fer­ent types of Spanish green table olive imports also face a 25 per­cent tar­iff, which was imple­mented as part of a pack­age of coun­ter­mea­sures awarded to the U.S. by the World Trade Organization after the European Union was found to have been ille­gally sub­si­diz­ing the air­craft man­u­fac­turer Airbus.

When a very high tar­iff is set for a coun­try, other coun­tries take the oppor­tu­nity to enter it,” de Mora said. And here Morocco, Egypt and Turkey have taken advan­tage of Trump’s obsta­cles to Spanish prod­ucts. And revers­ing that later has its difficulties.”

Along with table olives, imports of Spanish vir­gin and non-vir­gin olive oil in all of its frac­tions in con­tain­ers of less than 18 kilo­grams (39.7 pounds) also face a 25 per­cent tariff.

However, U.S.-based trade experts have said that the Trump administration’s tar­iffs on European goods will be both dif­fi­cult to undo and require large amounts of polit­i­cal cap­i­tal that Biden may be unwill­ing to spend.

The next admin­is­tra­tion would have the option of revers­ing the deci­sion, but that might be unlikely,” Douglas Irwin, who stud­ies U.S. trade pol­icy and teaches at the eco­nom­ics depart­ment of Dartmouth College, told Olive Oil Times in a 2019 inter­view. The most plau­si­ble out­come would be some U.S.-E.U. agree­ment on sub­si­dies that would allow the tar­iffs to be removed.”

Iriwn added that the tar­iffs would need to be removed by exec­u­tive action. Biden has promised a wide range of exec­u­tive actions, many of which will be focussed on con­trol­ling the COVID-19 pan­demic, rejoin­ing the Paris Climate accords and immi­gra­tion reform.

If Joe Biden wins, he will likely seek to reverse some of Trump’s more pro­tec­tion­ist pushes,” Geoffrey Gertz, a global econ­omy and devel­op­ment fel­low at the Brookings Institution, wrote just before the elec­tion. Yet he appears unlikely to sim­ply return to the trade par­a­digm of the Clinton, George W. Bush, and Obama administrations.”

Gertz added that Biden is likely to have a more con­fronta­tional trade pol­icy than his for­mer boss did. Pressure from both the left wing of the Democratic party and his long­stand­ing alliance with the coun­try’s labor unions are both likely to affect how a Biden admin­is­tra­tion nego­ti­ates trade deals.

While Biden has pub­licly crit­i­cized the Trump administration’s America First’ pol­icy, the pres­i­dent-elect has also said he would focus on improv­ing con­di­tions for American work­ers and busi­nesses before look­ing to cut new trade deals abroad.

I won’t enter into any new trade agree­ments until we’ve made major invest­ments here at home, in our work­ers and our com­mu­ni­ties – equip­ping them to com­pete and win in the global econ­omy,” Biden told the United Steelworkers.

Spain’s table olive and olive oil pro­duc­ers cer­tainly can expect a less com­bat­ive tone from the pres­i­dent-elect and fewer pol­icy-defin­ing tweets, but the legacy of Trump’s trade poli­cies are likely to per­sist long after he has left office.





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