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

Summary

President-Elect Biden has out­lined his pri­or­i­ties for when he takes office on January 20, includ­ing reviv­ing the econ­omy, tack­ling cli­mate change, and poten­tially reset­ting trad­ing rela­tions with the European Union. Spanish olive oil and table olive pro­duc­ers are hope­ful that Biden will undo tar­iffs imposed by the Trump admin­is­tra­tion, but trade experts believe revers­ing these tar­iffs may be dif­fi­cult and require sig­nif­i­cant polit­i­cal cap­i­tal.

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.”

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.”

“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.”

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.

“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.

• Hoy