- A group of 19 members of the U.S. House of Representatives — 14 Democrats and five Republicans — are urging the U.S. Trade Representative not to impose 100% tariffs on olive oil, Reuters reported. The stiff duty has been proposed as part of potential retaliatory tariffs against the European Union, and the lawmakers say it could cause high prices and shortages.
- These tariffs would affect not only consumers but also U.S. food retailers, manufacturers and restaurants as domestic olive oil production can only satisfy 5% of consumer demand, Joseph R. Profaci, executive director of the importers’ trade group North American Olive Oil Association, told the wire service.
- The U.S. Trade Representative’s Office has proposed other European products that could face tariffs, including olives, Italian cheese and Scotch whiskey. A decision is expected in the fall.
Incensed at the financial benefits the European Union is providing aviation manufacturer Airbus, the Trump administration plans to use food as ammunition to level the playing field. On April 8, the U.S. Trade Representative proposed 100% tariffs on $11 billion of imported products. The total dollar amount of products being targeted has mounted to $21 billion, according to Reuters. Aside from olive oil, many American happy hour staples are in jeopardy.
Parmesan, Belgian ale, prosciutto, Beaujolais nouveau, jamón, chevre are all on the cusp of going from a splurge expense to unaffordable. Olive oil is also included here, and it is unique because it is an everyday product that may be not as easy for the average consumer to forego.
From pasta to pizza, olive oil is essential. As a result, its popularity in the U.S. is growing. Total olive oil consumption in the U.S. has tripled since 1990. However, per capita consumption is still only 0.8 liters, a tenth of what an Italian consumer uses in a year.
For years oil was out of favor with consumers. Now, oils of different varieties have caught the attention of the public and are returning to fashion. Coconut, avocado, sunflower, safflower and peanut oil, as well as olive pomace oil, which can be used in high-temperature processing, are trendy additions to packaged foods and kitchens across the country.
But not all oils carry the same health benefits, and that is exactly why lawmakers are worried, Reuters reported. Olives are high in vitamin E and full of antioxidants and monosaturated fat, all of which are popular functional nutrtients that consumers are seeking in their food.
If tariffs make imported olive oil prohibitively expensive, there is always the possibility that California pick up some of the slack. California's production of olive oil is slowly increasing, but it still only accounts for about 5.8% of the total consumed in the U.S. Olive farmers have been working to increase this through the years. According to the California Olive Oil Council, the 400-plus olive growers in California produced a record 4 million gallons from an estimated 40,000 acres during the 2015-16 harvest. The group estimates 3,500 new acres will be planted annually through 2020.
Even so, it is going to be a strain to make up the difference if imported olive oil is unavailable. The majority of U.S. olive oil is imported from Spain and Italy, where tariffs would be applied.
The United States could always create new trade partnerships and increase imports from olive oil-producing countries outside of the eurozone. Tunisia, Morocco, Turkey, Argentina, Greece, Lebanon and Egypt all currently send olive oil to the States, with Tunisia being the largest supplier outside of European countries.
Of course, the easiest solution would be not to levy the tariffs in the first place. However, with several trade battles about to rage on many fronts, it's anyone's guess what will happen in the months ahead.