The U.S. Department of Commerce opened a probe last month to determine whether to slap duties on ripe olives from Spain, after Californian producers argued their Iberian rivals receive an unfair advantage because of the EU's lavish farm subsidy scheme.
For Brussels, the case could set an alarming precedent. Under the sacrosanct Common Agricultural Policy, the EU pours about 40 percent of its budget into farm subsidies and it is highly protective of any trade investigation that questions the legality of those payments. Last year, Brussels pushed back hard against Australia's moves to put tariffs on Italian tinned tomatoes.
Washington may prove a tougher adversary than Canberra. Brussels is bracing for U.S. tariffs to be imposed as early as November, as President Trump vows to slash the trade deficit with the EU, which swelled to $147 billion last year from $61 billion in 2009.
"What we are seeing here is Trump's 'America First' attacking our agriculture policy," said Clara Aguilera García, a Spanish member of the European Parliament. "It seems Trump's policies are encouraging U.S. producers to go down a protectionist path and try to shut out foreign competition."
De Mora, head of the Spanish olive association, accused the Californians of only starting their protests after the Spaniards launched major promotions for their fruit this year.
Criticism of Europe's farming subsidies is nothing new, and the CAP is often accused of unfairly hobbling competition, particularly in emerging markets. Earlier this year, former U.N. Secretary-General Kofi Annan quipped: "The European Union pays enough subsidies to fly each cow in Europe around the world first class and still have money left over."
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