Spanish olive growers claim first victory against U.S. duties

MADRID (Reuters) - Spanish olive growers have claimed an important victory in a U.S. court, which could help lift some of the duties imposed by President Donald Trump’s administration, Spain’s olive exporters’ association said on Tuesday.

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Spain is the world’s largest olive and olive oil producing country. Its industry was hit hard when the U.S. Commerce Department imposed duties of around 35% on Spanish black olives in 2018 after concluding they were being sold too cheaply and benefited from unfair subsidies.

The European Union opened legal action against the duties at the World Trade Organization a year ago.

The United States Court of International Trade said in a ruling issued on Friday, and cited by the Spanish association Asemesa on Tuesday, that some of the Commerce Department’s interpretations of the U.S. Tariff Act were arbitrary.

The court said subsidies on Spanish black olives were not specific and that the level of production of raw olives was dependent on weather rather than the demand from the food industry, contrary to the reasons the United States had cited when deeming the subsidies unfair.

The court gave the Commerce Department 90 days to argue why the duties should be maintained at current levels.

“The ruling is a very important endorsement of the EU’s legal action at the WTO,” said Asemesa, adding that duties could be lowered to 20% from 35% as a result of the U.S. court decision.

The Spanish government also welcomed the ruling as a first step towards finding a solution.

Spain exports around a quarter of its production of olives - not counting those used to make olive oil - to the United States, and around 40% of those are black olives which are sold to the food industry to make pizzas and other products.

Since the duties came into force, Spanish producers say exports to the United States have almost halved.

In a separate case, the Trump administration imposed 25% import tariffs on several European agricultural products in October, including Spanish olive oil, wine and cheese, as part of WTO-authorized countermeasures in a long-running spat over subsidies to planemaker Airbus.

Reporting by Emma Pinedo; Editing by Andrei Khalip and Pravin Char