E.U. Threatens to Impose Retaliatory Tariffs on U.S.

By Daniel Dawson

Jun. 12, 2020 08:43 UTC

The European Union Commissioner for Trade has said that the 27-member bloc may impose retaliatory tariffs on the United States, pending a decision from the World Trade Organization (WTO).

“We are waiting to see the outcome of the Boeing panel,” Phil Hogan told a press conference after an E.U. trade summit. “We will know this result in early July. Let’s wait and see the outcome first of all because I cannot anticipate what this outcome will be.”

In my opinion, retaliatory measures are not good for anyone. I think that a negotiation should be started between the U.S. and E.U. to remove these additional tariffs on Spanish olive oil.- Rafael Pico Lapuente, exective director, Asoliva

“Certainly in the absence of a negotiated settlement, there will be strong pressure by member states to ensure that the impact of this award will be implemented,” he added.

The U.S. and E.U. have been locked in a 15-year-long dispute, each one accusing the other of providing illegal subsidies to their respective aircraft manufacturers, Boeing and Airbus.

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Last October, the WTO ruled that the U.S. could impose $7.5 billion worth of tariffs on goods imported from the E.U. as a result of its illegal subsidies to Airbus. Included on the final list of U.S. tariffs were packaged Spanish olive oils and table olives from both Spain and France.

In April, the WTO ruled in favor of the E.U. in its own complaint about the U.S. providing illegal subsidies to Boeing and awaits confirmation on what punitive measures the bloc may take. The E.U. has published its own potential list of tariff targets, but carved out exceptions for goods that include olives and olive oil.

While the four countries that provided the illegal subsidies to Airbus (the U.K., Germany, France and Spain) all have been targeted by the U.S. tariffs, Spain’s agricultural sector has been hit particularly hard.

In recent days, pressure has been mounting in the country for the E.U. to either impose retaliatory tariffs on the U.S. or negotiate to remove olive oil from the list of tariffs.

In the seven months since the tariffs have come into force, Spanish olive oil exports to the U.S. have plummeted.

According to data from the United States Trade Representative, exports fell by 93 percent in the first quarter of 2020 (the last period for which data are available), compared with the same period in 2019. This precipitous drop has resulted in a loss of revenues for the sector of $85 million in the first three months of the year alone.

However, Rafael Pico Lapuente, the executive director of the Spanish Association of Olive Oil Exporting, Industry and Commerce (Asoliva), said that he would prefer to see mediation over retaliation.

“In my opinion, retaliatory measures are not good for anyone,” Lapuente told Olive Oil Times. “I think that a negotiation should be started between the U.S. and E.U. to remove these additional tariffs on Spanish olive oil, which are discriminatory and unfair.”

Earlier in the year, the U.S. decided not to increase the 25 percent tariff currently in place in Spanish olive oils, but a lawyer for the USTR warned that the organization would reconsider if the E.U. imposed tariffs on U.S. goods.

European Commission

E.U. Threatens to Impose Retaliatory Tariffs on U.S.

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