By Lisa Radinovsky
Spanish olive oil and olives are on the list of European goods subject to new American tariffs, but Greek olive oil and olives are not. Many Greeks in this sector are relieved, but what does this really mean for them? There is hope that it will enable Greeks to increase their market share in the USA, but also concern that some tariffs have been imposed.
On October 2, the World Trade Organization (WTO) ruled that the USA was entitled to impose tariffs on $7.5 billion worth of imported European products each year in retaliation for illegal European subsidies to the airplane manufacturer Airbus, until the subsidies end or an agreement is negotiated. Airbus is a competitor of the American company Boeing.
Chris Kay of California-based Carter Imports, which brings Greek products to the US, told Greek Liquid Gold, “I’m very opposed to the tariffs in general. Being caught in a dispute between two airplane manufacturers, many countries will feel the pinch. Greece does not produce any Airbus parts or have an Airbus manufacturing facility; it would have been terribly unfair to further squeeze one of our largest exports.” As it turns out, other key Greek and European products are being squeezed.
Although many wonder what agricultural products have to do with airplanes, the United States Trade Representative (USTR) announced 25% duties on standardized Spanish olive oil and olives and on Greek peaches and feta cheese, among many other products, but not on Greek olives or olive oil. Duties are scheduled to begin October 18. The USTR points out that the US could “increase the tariffs at any time, or change the products affected,” adding that the “USTR will continually re-evaluate these tariffs based on our discussions with the EU.”
The WTO is also considering the European Union’s accusation that the US provides illegal subsidies to Boeing, with a decision expected next year. If the WTO rules in favor of the EU, it may authorize tariffs on American exports to Europe. Or a settlement could be negotiated in order to avoid an escalating trade war between the US and the EU. The European Commission has proposed to work with the US “on a fair and balanced solution for our respective aircraft industries.”
In Europe, trade associations and government officials have sought to avoid these new tariffs, or at least to limit their extent. For example, Greek Prime Minister Kyriakos Mitsotakis and Minister of Rural Development and Food Makis Voridis have repeatedly met with American officials to urge that the financial impact on Greek products be reduced, and negotiations are continuing.
The Greek government emphasizes the importance of avoiding new duties for Greek olive oil and olives, which constitute 54.15% of Greek agricultural exports to the US (based on 2018 figures). The Ministry of Rural Development and Food reports that their lobbying efforts have helped enable continuation of “the seamless export of these two leading agricultural products to the large US market,” possibly allowing them to gain a competitive advantage over similar products.
Gregory Antoniadis, president of the Association of Greek Industries and Packers of Olive Oil (SEVITEL), told Greek Liquid Gold he appreciates the effective interventions of the Greek Ministry of Agriculture and the Prime Minister in favor of the Greek olive oil sector. Antoniadis believes the current situation does offer “an important opportunity for further penetration of Greek olive oil into the American market.”
Importer Chris Kay is interested in this “opportunity for Greek olive oil to make its rightful mark as a premium product. While everyone is talking about tariffs, we need to be telling US consumers to try our olive oil. Secondly, grocery retailers, distributors, and food brokers will go the financial path of least resistance, and this opens up [a way for] large Greek producers that may not yet have a US presence to come into the market at a competitive volume.” Moreover, “for consumers in the US, we have an opportunity to add variety to the market! It’s not just Spain and Italy that make great olive oil, but Greece as well.”
Some are less optimistic. Nikos Michelakis, scientific advisor of the Association of Cretan Olive Municipalities, points out that exporters of standardized olive oil from all the other olive oil producing countries will rush to fill the gap left in the market by the new duties on Spanish olive oil. He argues that the most experienced and well-versed in the US market, Italian bottlers, are most likely to capitalize on this opportunity, while bulk importers in the USA will also benefit. Greek bottlers of branded olive oil have the advantage of a market share in the US, but Michelakis points out that many of them will need to overcome the disadvantage facing smaller businesses for whom the high cost of visibility in large chain stores may be prohibitive.
Nikos Sakellaropoulos of Sakellaropoulos Organic Farms, producers of multi award winning extra virgin olive oil, flavored olive oil, and olives, told Greek Liquid Gold he believes “tariffs like these, whenever and wherever imposed, create difficulties for all the olive producers around the world. The olive and olive oil sector should be open, full of professionals and people willing to promote excellent olive and olive oil products.”
In addition to all the Europeans affected by tariffs on products they work with, many American consumers, shops, airlines, manufacturers, and importers are likely to suffer from these tariffs. Retail prices on many affected goods will increase, leading to fewer imports, inconveniencing American consumers, and disrupting the work of Americans whose employment requires these goods, according to Euractiv.
In California, Kay was glad to learn that Greek olive oil was not on the list for new tariffs because “had the tariffs been imposed on Greek olive oil, at the boutique volume that I do, it would have been something to potentially price us out of the market.”
The North American Olive Oil Association (NAOOA) is continuing its persistent efforts to have all olive oil removed from the list of goods subject to new duties. While the NAOOA is pleased that a lot of European olive oil is not on the list, and tariffs will be 25% rather than 100%, “the bad news is that any tariffs on olive oils from Europe are harmful to American consumers. Americans should not be asked to pay higher prices for products that are important to maintaining healthy eating patterns, and for which there is insufficient supply of domestic alternatives.”
For more background on this issue, see Remove Olive Oil from Prospective Tariff List, Urges NAOOA.
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Originally published on Greek Liquid Gold: Authentic Extra Virgin Olive Oil (greekliquidgold.com). See that site for recipes with olive oil, photos from Greece, agrotourism and food tourism suggestions, and olive oil news and information.