U.S. lawmakers say tariffs on EU olive oil pit Trump trade policy against demand

(This August 21 story corrects in 9th paragraph to show that tariffs have not been imposed and that the North American Olive Oil Association has, and continues to, oppose proposed tariffs on olive oil.)

FILE PHOTO: U.S Congressman Bill Pascrell gestures to the media at the hotel where the seventh round of NAFTA talks takes place, in Mexico City, Mexico March 4, 2018. REUTERS/Ginnette Riquelme

WASHINGTON (Reuters) - U.S. lawmakers on Wednesday urged the U.S. Trade Representative’s Office not to impose new import tariffs on European olive oil, warning they could lead to an olive oil shortage and higher prices in the United States.

European olive oil could face 100% tariffs as Washington prepares retaliatory tariffs against the European Union, part of the 15-year-long dispute over subsidies to planemakers Boeing BA.N and Airbus AIR.PA that has pitted the United States and EU against each other in a case in arbitration with the World Trade Organization.

“Without European imports of olive oil, the United States cannot meet current consumer demand,” said the group of 14 Democratic and five Republican members of the U.S. House of Representatives led by Democrat Bill Pascrell and Republican Jodey Arrington.

They said that the tariffs would harm U.S. food retailers, manufacturers and restaurants and argued against new tariffs because of the oil’s health benefits.

“Large price increases can push many consumers and food manufacturers to choose food oils that lack the health qualities of olive oil,” the letter said.

USTR did not immediately respond to a request for comment.

The lawmakers warned that a halt of imports of olive oil from the European Union would lead to a shortfall equal to 30% of current consumer demand, or 100,000 tons of olive oil.

Joseph R. Profaci, executive director of the importers’ trade group North American Olive Oil Association, said domestic production satisfies just 5% of U.S. demand for the oil.

The group has repeatedly opposed tariffs on olive oil among $21 billion of products that Washington first proposed in April.

On July 1, the USTR named more products - including olives, Italian cheese and Scotch whiskey - that could face tariffs when the WTO rules on the U.S. sanctions request, a decision expected this fall.

The WTO has found that the world’s two largest planemakers received billions of dollars of harmful subsidies in a pair of cases marking the world’s largest-ever corporate trade dispute.

Reporting by Jonas Ekblom; Editing by Cynthia Osterman