A World Trade Organization decision found that the E.U. has unfairly subsidized plane manufacturer Airbus. The result could be retaliatory tariffs on numerous E.U. goods, including olive oil.
The United States has proposed tariffs on $11 billion worth of European Union imports, including olive oil, in light of a decision made earlier this week by the World Trade Organization.
The escalation of tensions between the two comes after a WTO ruling that found E.U. subsidies for Airbus have an adverse impact on American producer, Boeing.
The U.S. threat to impose an import tariff on E.U. olive oil could prove significant for the E.U. industry, as the U.S. imports significant volumes from the bloc.- Gary Howard, senior news analyst at IEG Vu
“This case has been in litigation for 14 years, and the time has come for action,” Robert Lighthizer, the U.S. trade representative, said. “The administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures.”
The E.U. has criticized the U.S., saying $11 billion was a greatly exaggerated figure.
See Also:E.U. Challenges U.S. Tariffs on Spanish Olives“The E.U. is confident that the level of countermeasures on which the notice is based is greatly exaggerated,” a source within the bloc told CNBC News. “The amount of WTO authorized retaliation can only be determined by the WTO-appointed arbitrator.”
However, olive oil producers could be among the hardest hit, as more than one-third of olive oil exports are destined the the U.S.
The level of tariffs that the U.S. could impose on E.U. goods is still in arbitration and will not be determined for a few months. However, European olive oil producers could expect tariffs ranging from $0.034 per kilogram to $0.176 per kilogram, depending on the ruling.
“The U.S. threat to impose an import tariff on E.U. olive oil could prove significant for the E.U. industry, as the U.S. imports significant volumes from the bloc,” Gary Howard, a senior news analyst for agribusiness intelligence firm IEG Vu, said.
According to Eurostat, 35 percent of E.U. olive oil exports were destined for American ports during the first fiscal quarter of 2019, with an estimated value of $339 million.
Spain led the way, exporting 35,323 tons. This was followed closely by Italy with 30,898 tons. Portugal and Greece exported 1,410 tons and 3,506 tons, respectively.
During the 2017/18 harvest season, E.U. countries exported 194,570 tons of olive oil to the U.S., with an estimated value of roughly $1 billion.
Italian producers will likely be the hardest hit, according to Ettore Prandini, president of Coldiretti. Nearly half of all Italian olive oil that was exported in the first fiscal quarter of 2019 wound up in the U.S. Last year, Italy exported $436 million worth of the product stateside.
“It is a question of avoiding a clash of unprecedented and worrying scenarios that risks causing a dangerous avalanche effect on the economy, and on relations between allied countries,” Prandini said of the proposed tariffs.
Spanish and Greek producers will also be concerned about them as roughly one-third and one-half of their olive oil exports head to the United States, respectively.
Portugal and other E.U. producers will have less to fear as the bulk of their olive oil is exported elsewhere in the world, most notably Brazil and the Middle East.
More articles on: European Union, exports, import/export
Feb. 19, 2024
Major Changes in Argentina Provide Hope for Producers
The election of a conservative government has provided some producers with hope that Argentina’s economic situation – along with their own – will begin to improve.
Oct. 11, 2023
How Air Pollution Affects Olive Oil Quality in California
Producers and researchers weigh in on the impact of wildfire smoke and air pollution on the local olive oil industry.
Nov. 27, 2023
The Ricchiuti Family's 15-Year Journey to Olive Oil Excellence
The family behind Enzo Olive Oil have built a fledgling olive farm to one of the Golden State's most awarded brands.
Apr. 19, 2023
Lebanese Ag Minister Praises Producers’ Success on World Stage
Officials and producers hope the awards will promote Lebanese extra virgin olive oil in foreign markets and spur exports for the crisis-enveloped country.
Oct. 17, 2023
Award-Winning Chilean Producer Eyes Lucrative Brazilian Market
Las Doscientos capitalizes on its reputation for quality and free trade advantage to expand its market share in Brazil.
Apr. 22, 2023
Olive Oil Prices Rising Faster than Inflation in Italy
Olive oil prices at origin in Italy are 46 percent higher than last year, driving up the costs of other popular foods.
Feb. 20, 2024
New Research Rekindles Debate on Nutri-Score’s Effectiveness
The OECD found Nutri-Score could save money on healthcare. Dutch researchers questioned the integrity of studies supporting the labeling system.
Dec. 19, 2023
Olive Center Works to Educate Next Generation of Ag. Pros
The Olea Learn program teaches undergraduates the necessary agronomic and business skills to run an olive farming and olive oil production business.