Fair trade?

Now that Trump has won a second (and final) term in power, those disputes may reignite, with potentially damaging effects for the bloc. For Spain, the tariff problem will centre on its world-class olive oil industry.

Trump loves tariffs. At a rally in North Carolina last month, he announced that "outside of love and religion, it's the most beautiful word there is: 'tariff'." The 'Tariff Man", as Trump calls himself, is planning a blanket tax (which would have to be paid by domestic US importers) of between 10% and 20% on EU goods and up to 60% on products from China, which he claims will protect American industries and jobs. Some analysts predict that these measures might bring the EU to the point of recession by 2028 - because exports to the US will become prohibitively expensive for recipient companies - and start a trade war with China.

Might those forecasts be excessively gloomy? The EU is much more prepared for trade battles with the ultra-protectionist Trump now than it was in 2016. When Trump imposed levies of 25% and 10%, respectively, on steel and aluminium imported from the EU in 2018, the bloc retaliated by introducing tariffs on US products such as bourbon whisky, jeans and Harley Davidson motorbikes. A trade truce was called under president Joe Biden, but that will expire at the end of March next year, two months after Trump returns to the White House.

Spain's olive oil sector, which has a 35% market share in the US, will be wondering what's in store. In 2020, the industry reported an 80% reduction in sales to the US compared to the previous year, when Trump introduced a 25% tariff on some Spanish olive oils and French and Spanish table olives. That tax was itself a retaliatory strike against the EU, part of an ongoing war between the American aircraft manufacturer Boeing and its European rival Airbus over allegedly illegal subsidies.

Several retaliatory tariffs between the EU and United States were relaxed in 2021, as part of a resolution to the 17-year-long Boeing-Airbus battle. But, now Trump is preparing to get his favourite box of toys out again, major EU sectors, including Spain's olive oil industry, fear the short-lived peace is about to be shattered. Spain needn't worry too much: the EU has become as good at tariff warfare as Mr Tariff himself.