Spain’s economy is booming, the strongest in Europe. Sadly, its leading food exports, most notably olive oil and jamón, now face the greatest existential threats from recent U.S. tariffs. Spain, as the world’s largest producer of olive oil, has enjoyed a dramatic increase in olive oil exports to the US over the last ten years. Exports increased significantly over this period from 300,000 tonnes to 430,000 tonnes. In April, a surprise 20% tariff was placed on Spanish ham exports, sending producers and exporters into a panic. Though this tariff was subsequently reduced to 10%, fears among the innovative sector remain.
Today, the US consumes more than half of the world’s olive oil produced outside the European Union. In this light, the effect of these separate tariffs is particularly severe. No wonder then that ASOLIVA, the Spanish association of olive oil exporters, is alarmed. Like them, we believe these tariffs could seriously harm an industry that is key to the health of the country’s economy. Rafael Pico Lapuente, the director general of ASOLIVA, highlighted the importance of these negotiations, stating that “the negotiations representing the EU’s 27 countries are carried out by Brussels.”
The Spanish industry — home of the highly prized jamón ibérico — is in limbo. It accounts for an astonishing €750 million (about $850 million) in annual exports. It proudly ranks as one of Spain’s most exported food products. The sector provides more than 400,000 direct and indirect jobs, making it Europe’s largest pork industry. Now here’s why this development has producers particularly spooked— there is soaring demand for Spanish ham in the US market.
Jaime Fernández of Grupo Osborne underlined that the US is a very important market for them. As he noted, the unpredictable nature of tariffs creates a difficult environment for long-term planning and investments. He remarked, “The United States is one of our top, priority markets,” acknowledging its significance to their business strategy. In the face of uncertainty due to ongoing US tariffs, Fernández’s company is looking towards China as an alternative market.
The recent tariff changes have given new cause for economists to speculate about dire ramifications. As discussed by Javier Díaz-Giménez, a professor of economics, constant ebb and flow of tariffs would create anarchy in the industry. For the story, he recommended companies to broaden their market base. “If I was the CEO of any company with a high exposure to the United States… I would have sent my entire sales team to find other markets,” he stated. He expanded on this idea by stating that businesses need to start working on contingency plans now to make them less dependent on the US.
As we know, the trade negotiations currently underway between the EU and Washington are make-or-break for the future of Spain’s food exports. The unofficial deadline for wrapping up these negotiations is July 9. Pico Lapuente highlighted that industrial products often come to dominate the debate in negotiations like this one, having deep fears of what could be wrought. “In these negotiations,” he noted, “industrial products have a much bigger influence than food.”
He raised concerns about food products being used as bargaining chips, stating, “I wouldn’t like it if, in this negotiation, food products like olive oil were used as mere bargaining chips in order to get a better deal for Europe’s industrial products. That worries me. And I hope it doesn’t happen.”
These tariff fluctuations pose a threat to the black Iberian pigs whose meat makes the world-renowned jamón ibérico. Demand for this iconic specialty food product is surging in markets such as the US. Any permanent tariff would lead to the same imbalances in international market dynamics. Pico Lapuente made the case that a permanent 10% tariff, imposed the same way on every country, would not skew the competition. He thinks it would restore balance in trade competition.