Donald Trump’s pledge to put costly tariffs on olive oil imports could weaken customer demand Spanish commentators have warned.
The US President has pledged to increase tariffs on Spanish goods including wine and olive oil after mistakenly identifying it as a member of the BRICS bloc of developing countries.
The BRICS bloc comprises Brazil, Russia, India, China and South Africa – but the President’s comments were issued in the context of NATO spending, for which Spain’s is notoriously low.
Trump’s first 24 hours in office have been eventful to say the least, with a string of executive orders signed, infrastructure announced and costly tariffs declared on US imports from around the world.
Improted products could face additional taxes of up to 100% – something that economist and farmer Javier Santacruz said could make it “unfeasible” to sell Spanish goods in the US.
“Olive oil and wine are the two most important export products from Spain to the US,” Mr Santacruz told the COPE radio station.
“In the initial weeks, what Trump will try to do is force tariff negotiations but mainly make clear who holds the position of power,” he said, adding that the US’s trade surplus of over €9 billion (around £7.5bn) “will allow it to keep tightening the rope”.
However, it’s unclear whether Spain would be included in the most heavily tariffed countries after Trump mistakenly identified it as part of the BRICS bloc.
The President included Spain in the group when a journalist asked him about NATO countries which don’t meet the alliance’s minimum spending of 2% of economic output on defence.
Spain does rank last in the 32-nation military alliance for defence spending and was estimated to have shelled out just 1.28% on it last year. Trump has said he wants allies to reach 5% spending on defence.
After referring to the country’s defence expenditure as “very low”, he erroneously added: “They’re a BRICS nation, Spain. Do you know what a BRICS nation is? You’ll figure it out.”
He then repeated the threat of imposing high tariffs on BRICS countries, adding: “We are going to put at least a 100% tariff on the business they do with the United States.”
María Suárez, a Spaniard who lives in the US, warned that even a minor tariff increase could put people off shelling out for already-pricey olive oil – with the two litres her family consumes a month having a price tag of around $30 (£24) – something that a 20% tariff would see rise by $6 (£4.87).
The oil “could potentially lose market share among Americans or people from other backgrounds since refined and vegetable oils are much cheaper,” she warned.
The Chartered Institute of Procurement and Supply (CIPS) has also warned that items including olive oil and butter could shoot up around the world as the cost of obtaining and supplying them rises by up to 20%.
In response to the President’s threats of increased tariffs, Spanish education minister Pilar Alegria suggested that his inclusion of the country in BRICS could have been “the result of a mix-up”.
She added that the Spanish government considers the US to be “a natural ally”, in a statement to the PA News Agency.