The announcement by the President of the United States, Donald Trump, to impose a generalized increase to 25% ("Enjoy!") on products imported by his country, without specifying the affected sectors at the moment, has put the Spanish agri-food industry in the spotlight. The measure, which will initially be applied starting from April 2, could put at risk between 3,500 and 3,800 million euros annually in the total Spanish exports, according to the foreign trade data provided by the Ministry of Economy, Trade, and Business. As it happened during Trump's first term, the main victims, by far, would be olive oil (which could lose 1,036 million euros), wine (335 million), and table olives (200 million), according to initial estimates.
As the world's leading producer, with sales reaching 150 countries and encompassing 31 protected designations of origin, Spanish olive oil has begun to regain momentum this season after at least three consecutive years of very low productivity due to the poor weather conditions that caused a historic price increase for consumers. However, the arrival of rains in recent months has boosted production to approximately 1.5 million tons.
However, Trump's announcement has once again brought instability to a sector that was already foreseeing full recovery for its entire value chain: farmers, packers, exporters, and consumers. It should be noted that olive oil sales in the U.S. represent more than a quarter of the total agri-food exports, having reached 1,013 million euros in the last fiscal year, corresponding to approximately 180,000 tons of oil exported annually to the North American country: "There are no alternative markets that we have not explored in recent years and that could have a similar scale," acknowledges Rafael Pico, Deputy Director of the Spanish Association of the Olive Oil Industry and Export Trade (ASOLIVA): "It is an 'irreplaceable' destination." The U.S. accounts for 50% of global consumption outside the EU.
Thus, this expert details that the U.S. represents "the great market that is continuously growing." Its citizens are consuming more oil "and are willing to pay for it," which has motivated the sector to make "significant investments in recent years with the aim of opening multiple distribution channels and positioning ourselves more and more in this country." Hence, it is "very difficult to assess the overall losses because it is not only necessary to evaluate the quantities of oil that could stop being sold," he warns, but also everything worked on to date. Specifically, national investments in U.S. companies in the sector have exceeded by 823 million the American investments in Spain in 2023, the latest known data.
Trump has not specified the products, but the olive oil sector has little doubt that it will be affected, as happened during the first term of the American president. Pico points out that if the same percentage of tariffs is applied to all countries ("he is fixated on 25%), it would not distort the international market because it would also affect other countries like Tunisia, Morocco, Argentina, or Chile, among others: "It would increase the market and the purchase price for American consumers, but we would all be in the same conditions if there is really no distinction in tariffs based on origin." The suspicion, however, is that Trump may make exceptions and not impose identical quotas, thus favoring certain countries and punishing, for example, the European Union: "That measure would indeed make us lose competitiveness." In fact, the United States is the second destination for EU agri-food exports, valued at around 27,200 million euros. Globally, the EU has recorded a surplus in the agri-food trade balance with the U.S. of 15,421 million euros in 2023.
Out of the 180,000 tons of Spanish oil sent to the United States, "half of that production is sent packaged with a Spanish brand and the other 50% is sent in bulk, meaning that they have the possibility to sell it as if it were native with their own brand at the destination," analyzes this expert. Before the announcement, Trump had requested a report from his Department of Commerce on the trade balance that the United States has in the agri-food sector with the European Union, so the announcement "did not catch us by surprise," points out the representative of the Spanish olive oil industry association, who clarifies: "We managed to get by last time, but those restrictions only lasted three years," he recalls.
The intention of the American president is to protect the farmers of his country, although the oil production, focused in Texas and a small proportion in California, which only amounts to a total of 430,000 hectares, of which only 12,000 tons are dedicated to olive oil and the rest to vegetable oil and fats for the production of canola or avocado, at a significantly lower price. "The first to lose will be the American oil consumer, who will pay more," emphasizes Pico, little consolation for the Spanish agri-food sector which, after great efforts, occupies a strategic position in the trade balance with the United States, having become a clear reference by exporting quality products highly valued. Everything is now at stake.