Summary 
Paul Krugman called the tariffs announced by President Trump the biggest trade shock in history, with a 20 percent duty on olive oil imports from all European Union countries. The tariffs will make olive oil more expensive for U.S. consumers, potentially reshaping the global olive oil market and impacting producers in countries like Spain, Italy, and Greece.
The Nobel Prize-winning trade economist Paul Krugman called the sweeping tariffs announced by President Donald J. Trump “the biggest trade shock in history.”
The tariffs include a 20 percent duty on imports from all European Union countries, including Spain, Italy, Greece and Portugal.
U.S.-based producers, importers, and European experts have predicted that the tariffs would make olive oil a lot more expensive, leading to a pullback in consumption in favor of cheaper, less healthy seed oils.
See Also:Italian Exporters Double Down on U.S. Market Despite Tariff Risks
Other olive oil-producing countries, including Argentina, Algeria, Chile, Morocco, Turkey and Uruguay, face the baseline 10 percent tariff applied to nearly all other countries.
Meanwhile, imports from Tunisia will face a 28 percent tariff, South African exports to the U.S. will be subject to a steep 31 percent tariff, and Israeli exports will incur a 17 percent tariff.
“They [the Trump administration] basically took each country’s trade balance with the United States, divided by the amount of their imports and cut that in half,” Krugman said. “It was a kind of weird calculation.”
According to data from the United States Department of Agriculture (USDA), the most recent complete dataset available, in 2023, the U.S. imported $713 (€693) million of olive oil from Spain.
Separate data from Spain’s Ministry of Agriculture, Fisheries and Food show that olive oil exports to the U.S. increased by 57.7 percent last year, exceeding $1 billion (€920 million).
The world’s second largest consumer of olive oil also imported $707 (€653) million from Italy, $216 (€200) million from Tunisia, $213 (€197) million from Turkey, $101 (€93) million from Greece and $230 (€213) million from other countries.
Currently, U.S. local olive oil production accounts for less than five percent of the current level of consumption, which has grown exponentially across the last decades.
After the Trump administration’s announcement, Dcoop noted that the new tariffs “harm international trade and end up affecting the entire chain, from ranchers and farmers to the consumer (in this case, the American consumer), who is the final link that ends up assuming the increase in costs.”
According to the world’s largest producer, olive oil that will not reach the United States because of the tariffs will be sold in other markets. It warned that more competition could ensue and prices could decrease, hurting the production chain.
Institutions in Andalusia, Spain’s heart of olive oil production, are gearing up to cope with the new tariffs.
The goal is to unite the agricultural sectors and look for more promising markets as the U.S. may become less appealing.
The regional government’s initiatives also intend to monitor the impact that a more extensive availability of agricultural products, such as olive oil, on the national and European markets might have on prices and margins for the production chains involved.
In 2024, Andalusia alone exported €860 million ($945 million) of extra virgin olive oil to the United States.
María Morales, the president of the farming organization Asaja-Sevilla, warned that different tariffs imposed on the Mediterranean banks may cause further imbalance.
“Many countries on the other side of the Mediterranean [especially Turkey], our competitors in the U.S., have lower tariffs. So it will be easier for them to export,” she noted.
Record olive oil production reported in Turkey, combined with lower tariffs, makes the country an ideal candidate for increasing exports to the United States.
Currently, Turkish exports to Spain slightly exceed those to the United States. As tariffs turn the tables, volumes could quickly shift.
The Spanish government has already announced compensation for up to $15.7 (€14.4) billion to help the country’s companies cope with the shock. This safety net will be extended to all major economic sectors hit by the new tariffs.
Those same tariffs are worrying the Italian olive oil sector as well. Many Italian olive oil exports are destined for the United States, reaching approximately 100,000 tons.
“The U.S. is the number one export market for Italian extra virgin olive oil,” said Nicola Ruggiero, president of the Oliveti d’Italia Consortium. “Of the €3 billion ($3.3 billion) in exports in 2024, about €1.1 billion ($1.2 billion) comes from trade with America.”
According to Ruggiero, with the new tariffs, a slowdown can be expected “in the short-term, but we don’t yet know how American consumers will react. Many buy extra virgin olive oil for health reasons,” he remarked.
Still, in a note, the Italian Trade Agency (ICE), an Italian governmental agency, warned operators that many uncertainties loom on several sectors as April 9th approaches, the day the tariffs should come into force.
According to ICE, tariff exclusion mechanisms might be activated for individual companies or products when the imported goods are not domestically available in the United States.
While the tariffs will come into force too quickly for companies to build new factories in the U.S., some large international bottlers have been investigating potential solutions.
“ We’ve been investigating if there’s the opportunity to work with somebody [to co-pack in the U.S.] because we’re not going to be able to build a factory in America in time,” Walter Zanre, the managing director of Filippo Berio UK, told Olive Oil Times in an interview two weeks before the tariffs were announced.
“Perversely, President Trump is right because [tariffs mean] we are going to have to bottle in the United States and create jobs in America, and we’re probably going to have to let people go in Italy because we’re reducing production there,” he added. “So he achieves his goal of moving employment from outside of America into America.”
Another major European olive oil producer, Greece, exports about 20,000 tons of extra virgin olive oil annually to the United States.
In Greece, olive oil producers are asking the Ministry of Development for protection from the consequences of the new tariffs, which are not easy to foresee.
“We are clearly concerned about the developments,” said Dimitris Evangelinos, a spokesman for the Agricultural Cooperative of Organic Olive Producers of Olynthos, in northern Greece.
“The 20 percent tariffs that were announced will certainly result in the product on the supermarket shelf being more expensive,” he added.
He believes the new conditions will pressure the profit chain and farmers. “All of this while the cost of production has made the sustainability of the profession more difficult, and we also have climate change that affects our harvest,” Evangelinos said.
He did not rule out that new conditions might arise. “In the past, with President Donald Trump, there were announcements, and they were withdrawn for olive oil. We hope the same will apply now,” Evangelinos said.
Local experts added that the new tariffs will affect the agrifood sector, which accounts for about 37 percent of all Greek exports to the U.S.
That represents a value of €450 million ($495 million) out of the total €2.4 billion ($2.64 billion) worth of Greek shipments to the U.S.
According to local media, many extra virgin olive oil producers risk losing competitiveness and market share in the U.S. in the medium term.
While most E.U. observers of the olive oil market concur that some time will pass before they understand the impact of the new tariffs, most operators and associations said a unified response from Brussels is needed.
“The E.U. cannot stand idly by in a world where trade balances are changing rapidly and Trump has wrecked the World Trade Organization (WTO) agreements,” said Ricardo Serra, president of Asaja-Andalucía.
Noting how the E.U. adapted its agricultural policies for years to meet WTO standards, Serra said, “We have removed tariffs and linked CAP subsidies to crop production, and now it turns out that overnight and in one fell swoop, Trump has blown all of that up.”