Janice R. Andrews
The European Union (EU) is preparing retaliatory measures in a long-running trade conflict with the United States over Spanish black olives. The European Commission has confirmed it is finalizing a list of U.S. products to target with tariffs, following the unresolved dispute that dates back to Donald Trump’s presidency in 2017.
The Root of the Dispute
The trade dispute began in 2017 when the U.S. imposed anti-subsidy and anti-dumping duties ranging from 30% to 44% on Spanish black olives. The U.S. claimed that EU subsidies under the Common Agricultural Policy (CAP) gave Spanish producers an unfair advantage, harming American farmers.
The EU challenged these tariffs at the World Trade Organization (WTO), and after a lengthy legal battle, the WTO ruled in November 2021 that the U.S. tariffs were in violation of international trade rules. Despite the ruling, the European Commission maintains that the U.S. has not complied with the WTO’s recommendations to lift the tariffs.
EU Plans Retaliatory Action
On November 15, the EU formally requested permission from the WTO’s Dispute Settlement Body (DSB) to impose retaliatory tariffs on U.S. goods. The WTO is expected to review and approve the request at its meeting on November 25.
A spokesperson for the European Commission explained, “The EU aims to impose tariffs on U.S. products to compensate for the negative economic impact of the illegal U.S. tariffs, until the U.S. complies with the WTO ruling.”
The EU is currently identifying specific U.S. goods to target. While the WTO generally prefers retaliatory tariffs within the same sector—agriculture in this case—countermeasures could extend to other sectors if necessary.
Targeting U.S. Exports Strategically
John Clarke, a former senior official at the European Commission and WTO negotiator, explained that the EU typically targets U.S. exports with the same economic impact as the illegal tariffs. “The principle is goods for goods,” he said. Clarke suggested that the EU would focus on U.S. products valued at around €35 million.
Historically, the EU has strategically targeted well-known American products, such as Bourbon whiskey and Harley-Davidson motorcycles, which are produced in key political regions of the U.S.
Impact on Spanish Olive Industry
Spanish olive producers have faced severe financial losses due to the U.S. tariffs. Copa Cogeca, a European farmers’ lobby group, reports that Spanish producers have spent €17 million on legal fees and lost nearly €300 million in exports since the tariffs were imposed in 2018.
A Copa Cogeca spokesperson expressed disappointment, saying, “We regret that the U.S. has not complied with the WTO ruling and that diplomatic efforts have not led to the removal of these tariffs.”
The U.S. remains the largest market for Spanish olives, accounting for approximately 35% of exports, making the ongoing tariffs particularly damaging to Spain’s agricultural sector.
Wider Trade Concerns
This olive dispute is part of broader tensions between the EU and the U.S. Over the past few months, Trump has floated the idea of imposing new tariffs of up to 20% on European imports, raising concerns about a potential new trade war between the two regions.
Any escalation of this dispute could have significant economic consequences, particularly for European industries, including Spain’s olive producers, who are already suffering from the existing tariffs.
What’s Next?
The WTO’s decision on November 25 will determine whether the EU can proceed with its planned retaliatory tariffs. If approved, it would signal a further deterioration of EU-U.S. trade relations, especially with Trump’s potential return to the White House in 2025.
The dispute over Spanish olives highlights the complexities of international trade and the far-reaching impact of unresolved trade conflicts. The outcome will have significant implications for both the Spanish olive industry and EU-U.S. relations as a whole.
