A bustling Seville bar at lunchtime showcases a quintessential Spanish scene: jamón ibérico being expertly carved. This iconic cured ham, a national treasure, represents a €750m annual export industry.
Jaime Fernández, Grupo Osborne’s international commercial director (producers of Cinco Jotas ham), highlights jamón ibérico’s cultural significance, emphasizing the acorns its pigs are traditionally fed.
However, this flagship product faces a significant challenge: US President Trump’s trade tariffs.
Initially a 20%, now a 10% (pending negotiations) tariff on European imports, including Spanish ham, casts a shadow of uncertainty. A potential increase to 50% looms if trade talks fail by July 9th.
Fernández expresses concern, stating that the US is a top priority market and this uncertainty hinders long-term planning and investment.
Despite Spain’s robust economy (IMF projected 2.5% growth, unemployment at a 17-year low), tariffs severely impact the pork industry—a sector providing over 400,000 jobs and Europe’s largest.
The US, now the largest importer of Spanish ham outside the EU, faces potential price increases, reducing Spanish ham’s competitiveness against domestic products.
Spain’s olive oil sector faces similar difficulties. The world’s top producer, Spain had targeted the US, a rapidly growing market, but drought and tariffs compound the issue.
Rafael Pico Lapuente, director general of ASOLIVA (Spanish olive oil exporters), notes US olive oil consumption represents half of the global market outside the EU, with imports from Spain soaring from 300,000 to 430,000 tonnes over the past decade.
Lapuente suggests a permanent 10% tariff might be manageable, with US consumers absorbing the cost. However, higher tariffs than those faced by competitor countries (Turkey, Tunisia) would severely impact Spain.
Javier Díaz-Giménez, IESE business school professor, highlights the potential for trade deflection if tariffs vary between nations, leading to goods routed through countries with lower tariffs—making enforcement challenging.
Both Lapuente and Fernández express concern regarding the influence of food producers within EU negotiations, fearing food products might be used as bargaining chips in broader industrial trade deals.
While the European Commission affirms its commitment to defending European interests, Fernández believes a 10% tariff is manageable, but a 20% tariff would necessitate exploring alternative markets (e.g., China, France, Italy, Portugal).
Díaz-Giménez emphasizes the need for proactive diversification: companies should already be actively pursuing alternative markets to mitigate US exposure.
Higher prices for some items were offset by declines in other areas, such as petrol, airfares and clothing.
The world’s two largest economies have agreed in principle a framework for de-escalating trade tensions.
India and US began negotiating a trade deal before Trump unveiled his 2 April ‘Liberation day’ tariffs.
Jetstar Asia has struggled with rising supplier costs, high airport fees and increased competition.
The US, Japan and the euro area are all expected to have lower growth as Trump’s tariffs bite.