Falling prices due to a successful campaign cushion the blow to Spanish olive oil from Trump.

The Trump administration 's spiral of tariff swings has come to an end, at least for now. The US president appears to have found common ground with European Commission President Ursula von der Leyen: on July 28, they agreed on a new trade framework in which they agreed on a single, definitive 15% tariff for most products. Among them, the liquid jewel of Spanish cuisine, olive oil.

After passing through US customs, a liter of this olive derivative will be 15% more expensive than usual, or at least for now, as negotiations on the alleged trade concessions between the two blocs are still pending.

Paradoxically, the North American country is the largest importer of olive oil in the world, behind only the EU. Even more paradoxically, Spain is its main supplier, with an estimated value of one billion euros. Of the 362,618 tons that crossed the transatlantic border to the US during the 2023/24 campaign, approximately two-quarters were Spanish: 125,728 tons exported directly and around 57,000 triangulated through Italy.

While at first glance it seems that our gastronomic label will be one of the products most affected by the tariff imposition, this may not be entirely the case due to the price difference between campaigns, COAG sources explain to ABC.

Today, the cost of a liter of olive oil traded with the United States has been cut in half. Three and a half euros is what it will cost an average American to buy a bottle of Spanish liquid gold in 2025, something that seemed impossible less than two years ago, when it was sold for between seven and one euro. Therefore, the 15% tariff on the final price would keep the amount payable lower than in previous years. "There is more than enough room to handle it," COAG points out.

Furthermore, in the United States, the Spanish oleic acid seal is a gourmet product. Therefore, what concerns American consumers is not so much the price they pay, but the quality they receive. "They are very demanding when it comes to the quality of the oil ," COAG points out.

Americans consume an average of one liter of oil per person per year, which is double the global average (0.45 liters). However, their domestic production capacity barely reaches 3% of demand , concentrated mainly on the country's west coast: California accounts for 99% of production, thanks to its Mediterranean climate.

This isn't the first time olive oil has had to pay taxes to enter the US market. During Trump's first term, the open war between Boeing and Airbus resulted in collateral damage: our flagship product, olive oil. The difference is that back then, not all incoming production had to pay taxes; only bottled products were subject to them. The US president's rationale was to move that part of the production chain to his country, penalizing part of the oil sector and exempting the base oil. With this liberalization, he sought to incentivize part of the Spanish sector to relocate its bottling plants across the Atlantic and, in doing so, defend the US industry, according to Dcoop sources.

Thus, the agri-food cooperative expresses its dismay at the tax on olive oil , as this European product doesn't compete with American olive oil—because there aren't any, as has been pointed out. On the contrary, they point out, "being a deficit country, it needs to import to cover domestic demand."

For the past six years, Spain has maintained its dominance in oil production among suppliers of this greenish liquid. During the last campaign, 86% of total exports to the U.S. went to four countries: Spain, Italy, Tunisia, and Turkey.

With Spain leading the way, accounting for 34% of the total and a 9.8% increase in sales, and Italy following closely behind, with 31% and 3%, respectively; among the problems keeping the sector on edge are potential unequal treatment within the Group of Twenty-Seven, as well as the situation Spain would face relative to its international competitors if US imports seek alternative markets in a context of unequal tariff imposition . However, it is not so much intra-EU competition that concerns our olive oil sector, but rather the competitive imbalances that could arise between non-EU suppliers.

Thus, the case of Tunisia stands out, the third-largest exporter of this greenish liquid. During the 2023/24 campaign, the Tunisian Republic increased its trade to the United States by 50.3%, with 57,137 tons, equivalent to 15% of the total. And more recently, the smallest country in the Maghreb increased its oil shipments by 13.7% in the first months of the 2024/25 campaign. With a volume of 38,197 tons, Tunisia is gaining ground on the EU, almost stepping on the toes of Spanish oil producers, whose sales volume increased by 3.6% in the current campaign, to 49,986 tons. Furthermore, COAG points out that the EU-Tunisia agreement currently allows the entry of 56,000 tons of oil tariff-free to our borders, which harms the domestic production of our compatriots.

Another major supplier to Donald Trump's country is Turkey , however, its turnover is more marginal. While in the 2023/24 season they reduced sales by 52.6% to 22,859 tons, a year later they have recovered part of their capacity thanks to a 79.8% increase that has allowed them to sell a total of 17,509 tons.

The average harvest for the 2024/25 season in Spain is around 1,400,000 tons . As our country was experiencing a significant deficit, the sector has been able to sell its production, and prices have been cut in half, mitigating the impact of tariffs. However, while the forecasts for the 2025/2026 season are not bad, they are not better than the current ones. Cooperatives predict a slight decline in some regions due to the presence of pests and lack of rainfall.

With three months to go until the start of the 2025/26 season, and if there is no water shortage, production could remain at similar levels , allowing for sustained prices at source and mitigating the tariff storm.