US Vs. EU Trade
CÓRDOBA, Spain (AP) — Olives are harvested the old-fashioned way on Juan Luque’s farm in southern Spain, as men thrash the gnarly tree limbs with poles, raining the small green fruit into the motorized collector waiting underneath.
But for Luque and thousands of other farmers scattered across Europe’s countryside, the brewing tariffs war between Washington and Brussels over subsidies to airplane makers is putting his livelihood and countless jobs at risk.
“It is totally unfair that a commercial war in the aeronautical sector affects the agriculture sector,” he said Friday, working under the hot Spanish sun.
“European authorities must handle this and the Spanish government must handle this so (it) can get solved in a way that doesn’t affect agriculture.”
The Trump administration announced Wednesday a long list of European products it plans to place hefty tariffs on, after getting approval from the World Trade Organization over European subsidies for plane-maker Airbus. The European Union is expecting a similar ruling over U.S. subsidies for Boeing that would allow it to set tariffs on American goods.
Spain, France, Germany and Britain are shareholders in Airbus. The four were targeted with more tariffs that other EU countries.
The U.S. will place a 10% tariff on planes. But the rest of the long list of goods, mostly agriculture products that are very important to Spain such as olives and cheese, are set to be walloped with a 25% import tax.
The Spanish government said Friday that it was summoning the American ambassador in Madrid so that it could express its “complete opposition” to the proposed tariffs.
The director of the Spanish Federation of Food and Beverage Industries, Mauricio García de Quevedo, calculates that if the tariffs go into effect they will endanger 1 billion euros ($1.1 billion) worth of exports for Spain. The United States is the Spanish food and beverage sector’s second-biggest client after the EU, according to the federation.
“This type of tariff kicks you out of the market, and there is no alternative to the American market,” García de Quevedo told Spanish state broadcaster TVE.
For Rafael Sánchez, the director general of DCOOP, a cooperative of 75,000 farmers in southern Spain, the tariffs leaves Spain at a huge disadvantage to other countries, including EU members Italy and Greece, which were not targeted for olives or olive oil by the proposed tariffs.
“We have been placing big bets on the United States market for many years, for many years we have been the leaders of the olive oil market in the United States with 130 million kilos every year, and now we get a tariff exclusively for the Spanish olive oil?” Sánchez told The Associated Press. “Well that puts us in a much more complicated situation than the one Italy or Greece can find themselves in.”
The U.S. tariffs do not go into effect before Oct. 18, leaving some space for negotiations.
“The government of Spain will bring to bear all the pressure (it can),” Spain’s Minister of Agriculture, Luis Planas, said Friday.
Planas said Spain was going to push the European Commission to have the agricultural products removed from the American list.
European officials said they hope to engage the U.S. in talks on the new tariffs, but are ready to respond with taxes on American goods if needed.
“The EU must react and probably raise punitive tariffs itself after WTO approval,” German Foreign Minister Heiko Maas wrote on Twitter, in an apparent reference to a similar WTO case involving Boeing.
Maas, however, said that the EU “remains prepared to jointly negotiate rules for subsidies to the aircraft industry.”