Spanish Black Olive Exporters Struggle to Stay Afloat Amid Fresh U.S. Tariffs

Economic

Summary:

Spain’s black olive exporters, already reeling from earlier U.S. trade restrictions, now face an additional 15% tariff under the latest EU-U.S. deal, intensifying pressures that have already halved market share...

Tariff Burden Deepens for Spain’s Black Olive Industry

Spain’s black olive exporters are bracing for further hardship after the United States imposed a fresh 15% tariff on EU goods under a new trade agreement. This comes on top of the 30%+ duties first introduced by the Trump administration in 2018, which had already devastated the sector by slashing Spain’s U.S. market share from 49% in 2017 to just 19% in 2024.

Though less severe than the previously threatened 30% rate, the new 15% tariff is viewed by industry players as a fatal blow to an already weakened sector. Unlike green olives or olive oil, which remain exempt, black olives are once again singled out adding to what exporters argue is a targeted and protectionist U.S. policy aimed at favoring domestic producers.

Causal Pressures: Tariffs and Drought Amplify Losses

The impact of tariffs has not occurred in isolation. Spanish producers were simultaneously hit by severe drought conditions, which led to the loss of around 400,000 work shifts out of a total 2.5 million during peak harvest years. The combination of weather shock and sudden tariff exposure caused U.S. black olive imports from Spain to plunge by 70% in the first year alone.

These challenges forced the industry to adapt. Some exporters restructured operations to focus on green olive sales, which face lower barriers in the U.S., while others explored new markets in Europe, Asia, and the Middle East. In some cases, product innovation became a survival tactic, with producers introducing novel offerings like salmon- or cheese-stuffed olives to attract consumers in alternative regions.

Partial Recovery and Structural Shifts

Despite the setbacks, a few large firms such as Agro Sevilla managed to partially rebound. Through legal and lobbying efforts, Agro Sevilla succeeded in reducing its specific tariff rate from 31% to 10% by disproving U.S. claims of excessive EU subsidies. Its black olive sales to the U.S. have since grown gradually, though the broader sector continues to suffer.

Interestingly, Aceitunas Guadalquivir, another major Spanish exporter, acquired Bell-Carter Foods a top U.S. company that had lobbied for the tariffs. This ironic twist allowed Spanish firms to re-enter the market indirectly, as some U.S. producers, facing low domestic yields, import raw Spanish olives for local processing bypassing the tariff.

According to Asemesa, Spain’s Association of Table Olive Exporters, only four major exporters remain from the original 25 active before tariffs were introduced. This consolidation reflects the steep cost of trade restrictions on small- and mid-sized players unable to weather prolonged disruptions.

Trade Data Undermines Tariff Effectiveness

Despite U.S. claims that tariffs would revive domestic production, import data paints a different picture. Table olive imports surged by 40% from 2017 to 2024, with countries like Egypt, Portugal, and Turkey increasing their U.S. shipments. While Spain’s black olive exports fell, green olive exports to the U.S. rose by 18%, offering partial compensation but not enough to offset overall revenue losses.

The Spanish Ministry of Agriculture estimates that since the tariffs were imposed, the country has lost nearly €240 million in black olive export revenue about one-third of the total export value from the most recent harvest.

Tariffs Reshape Trade Landscape but Fail to Rebuild U.S. Supply

Spain’s black olive sector stands as a clear case of prolonged exposure to geopolitical trade measures with lasting economic consequences. The relationship between tariffs and industry decline is directly causal: protectionist policies have not only reduced Spanish access to the U.S. market but have also triggered workforce reductions, sector consolidation, and strategic redirection.

While exporters have shown resilience through diversification and innovation, the new 15% tariff compounds long-standing challenges. Even as firms adapt, the structural damage suggests that Spain’s dominance in black olive exports to the U.S. may never fully recover. At the same time, the tariffs have failed to deliver a renaissance for U.S. olive growers, revealing a disconnect between protectionist intent and market outcome.

Source: Reuters

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Economic

U.S. Tariffs Alone Unlikely to Prompt EU Downgrades, Says Fitch

Fitch Ratings has clarified that the sharp jump in U.S. import tariffs on European Union goods from 1.2% last year to a new baseline of 15% does not, by itself, warrant immediate sovereign credit downgrades across the bloc. According to Ed Parker, a senior sovereign analyst at Fitch, the agency had already incorporated tariff pressures into its economic models earlier in the year, minimizing the element of surprise in current economic projections.

Parker emphasized that while the tariff hike is significant in magnitude, its inclusion in Fitch’s baseline scenario since March means it doesn’t materially alter their macroeconomic outlook. In other words, the causal relationship between tariffs and sovereign credit ratings is not automatic; the existing 15% tariff level had already been considered in Fitch’s 2025 assessments.

Tariffs Could Worsen Underlying Fiscal Strains

Despite dismissing the immediate threat of rating changes, Fitch acknowledged that the trade measure could compound fiscal and macroeconomic stress, especially in EU economies already struggling with elevated debt burdens or weak growth trajectories. Here, the relationship between trade friction and credit quality is more indirect: the tariffs are not a sole driver, but they increase the pressure on countries facing structural vulnerabilities.

The warning suggests a scenario of correlation rather than direct causality. Countries already operating within narrow fiscal margins or experiencing export dependency may see their risk profiles worsen over time if retaliatory tariffs emerge or if broader supply chain dislocations persist. These accumulated risks, while not immediately actionable from a ratings perspective, could contribute to downgrades if they intersect with other deteriorating indicators such as budget deficits, rising borrowing costs, or reduced investor confidence.

Fitch’s stance underscores a measured approach to the evolving U.S.–EU trade relationship. While the agency does not foresee the 15% tariff hike leading directly to sovereign downgrades, it recognizes that the policy shift adds weight to already mounting economic headwinds. The credit outlook for EU nations remains stable for now, but the cumulative effect of sustained trade pressure, if unresolved, could eventually alter the region’s risk profile. As such, sovereign ratings will depend more on how member states absorb or offset these external shocks than on the tariff measure alone.

Source: Reuters

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China–U.S. Trade War

Diplomatic Maneuvering Alters Taiwan’s Travel Plans

President Lai Ching-te’s overseas visit initially slated to include stopovers in New York and Dallas has been quietly shelved after U.S. officials withheld approval, reportedly due to rising sensitivities surrounding trade negotiations with Beijing. While Lai’s office publicly attributed the cancellation to typhoon recovery and tariff talks, sources familiar with the matter confirmed that lack of U.S. authorization played a central role. Lai had intended to visit diplomatic partners Paraguay, Guatemala, and Belize, but the full trip now appears deferred.

This is not the first time Taiwan’s top leadership has adjusted travel plans to accommodate broader U.S. geopolitical strategies. Last year, a planned stopover was postponed following a Biden administration request during the U.S. election period. However, this latest cancellation is uniquely significant, coming at a time when Trump is reportedly seeking to arrange a meeting with Xi Jinping and soften certain tech curbs imposed on China.

Trade Talks and Taiwan: A Delicate Balancing Act

The Trump administration’s decision to sideline Lai’s visit appears causally linked to its strategic calculus in trade diplomacy. With high-level U.S.–China trade negotiations underway and a tariff truce extension likely, the White House seems keen to avoid disrupting fragile progress. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in Stockholm this week, aiming to finalize terms that could stabilize global markets and pave the way for a summit between Trump and Xi.

In this context, Lai’s high-profile U.S. stopovers were viewed as potential irritants to Beijing, which categorically opposes official interactions between U.S. leaders and Taiwanese officials. Though the U.S. State Department insisted that such transits remain consistent with established policy, Trump’s silence and Lai’s exclusion highlight a departure from precedent.

The decision also underscores the correlation between Taiwan’s international presence and broader trade negotiations: when bilateral tensions ease, Taiwan’s visibility recedes, revealing its precarious position as a geopolitical variable in great-power bargaining.

Strategic Concerns Over U.S. Commitment to Taiwan

The exclusion of Lai from U.S. soil has sparked alarm among both Taiwanese officials and American observers. Critics argue that this signals weakening U.S. resolve toward Taiwan, potentially emboldening Beijing. Former House Speaker Nancy Pelosi called it “a dangerous signal,” warning that Washington appears vulnerable to Chinese coercion.

Former U.S. diplomat Laura Rosenberger echoed this sentiment, stating that granting China de facto veto power over Taiwanese engagement moves the goalposts for diplomacy. While Trump publicly downplayed his interest in a Xi meeting claiming he would only visit China upon invitation the administration’s actions suggest otherwise.

Such caution could be interpreted as a concession: evidence that Taipei’s diplomatic agency is now constrained by the White House’s trade priorities. The cause-and-effect relationship is clear Washington’s pivot toward easing trade tensions with Beijing directly undermines Taipei’s efforts to assert itself internationally.

Domestic and Regional Implications for Taiwan

The fallout from this canceled visit carries domestic consequences for President Lai. Already under pressure after securing the presidency with a historically narrow margin, Lai now faces criticism from both home and abroad for appearing politically isolated. A failed attempt to unseat lawmakers further weakened his coalition, while opposition parties pushing for Beijing rapprochement are gaining momentum.

Meanwhile, Taiwan’s trade representatives are in Washington, attempting to avert a looming 32% tariff a sharp contrast to Lai’s inability to even secure a diplomatic layover. Although Taiwan’s Foreign Ministry denied any formal cancellation or obstruction, the broader diplomatic retreat is difficult to disguise.

Historical Context Highlights Policy Shift

Historically, stopovers by Taiwanese presidents have been tolerated by U.S. administrations, despite periodic Chinese backlash. Yet when then-President Lee Teng-hui visited Cornell University in 1995, the result was China’s missile tests and the onset of the Third Strait Crisis. These past precedents illustrate the risks of antagonizing Beijing but also the costs of appeasing it.

The most comparable precedent to Lai’s rebuff may be George W. Bush’s 2006 rejection of President Chen Shui-bian’s stopover request, viewed at the time as a rebuke of Taiwan’s independence-leaning agenda. Lai’s experience echoes that episode, suggesting the Trump administration may be willing to recalibrate Taiwan policy as a transactional instrument in broader negotiations.

Lai Ching-te’s blocked U.S. transit highlights the fragile equilibrium between Taiwan’s diplomatic ambitions and the strategic demands of U.S.–China relations. The causal relationship between trade diplomacy and Taiwan’s international standing is now unmistakable: as Washington prioritizes a trade breakthrough with Beijing, Taipei’s global engagement is being tactically restrained. This development reveals a deeper truth Taiwan’s geopolitical leverage remains contingent not just on its own resilience, but also on how its interests are weighed against broader U.S. strategic objectives.

Source: Reuters

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Port Throughput Falls Amid Cooling Trade Surge

After months of record-setting growth, China’s trade volumes hit a significant obstacle last week. Data from the Ministry of Transport revealed that national port throughput fell to 6.2 million containers the lowest weekly figure since early May. This nearly 7% decline from the previous week marks the sharpest contraction in container movement in almost three months.

The slowdown arrives after a historic run in May and June, when China’s ports processed over 30 million containers each month unmatched by any prior 30-day period on record. This export rush was primarily driven by companies racing to ship goods ahead of stiff U.S. tariffs, which now appear more permanent, averaging about 50%.

Trade Surge Driven by Front-Loading Begins to Fade

The dramatic upswing in trade earlier this year had clear causal roots: exporters accelerated shipments to circumvent Donald Trump’s tariff regime. This front-loading behavior temporarily boosted China’s trade and helped stabilize broader economic indicators during a period of mounting external pressure. However, the recent weekly drop suggests that the benefits from these early shipments are now diminishing.

The slowdown should be seen in the context of changing global trade dynamics, especially as the United States actively pursues trade agreements with other regions and maintains its tough stance on Chinese goods. The plateau in export volume is not necessarily a reversal, but it reflects the exhaustion of short-term tariff avoidance strategies.

Air Freight Remains a Bright Spot

In contrast to the weakening in seaborne cargo, air-freight activity remains resilient. China recorded nearly 3,500 international cargo flights last week, a figure significantly higher than at the same time in 2024. This continued strength in air logistics likely reflects demand for high-value and time-sensitive goods, and it suggests that global supply chains remain robust in sectors less reliant on bulk shipping.

Air freight’s outperformance could also be linked to shifts in product composition and logistics strategy, where companies are prioritizing flexibility and speed over sheer volume amid global uncertainties.

The decline in container throughput signals that China’s record-breaking trade expansion has encountered its first major constraint in months. The relationship here is clearly causal: trade acceleration due to tariff front-loading has reached its natural limit, while long-term structural pressures like sustained tariffs and global diversification begin to exert drag. Although air freight remains strong, the broader trend suggests China’s export machine may be entering a more measured phase. Future trade resilience will depend on how effectively China adapts its manufacturing and logistics strategy to a world increasingly defined by trade fragmentation and regulatory headwinds.

Source: Bloomberg

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Economic

Political

Washington needs additional talks to gauge how ambitious India's government is willing to be to secure a trade agreement, Greer said in an interview on CNBC on Monday. He acknowledged he had previously suggested a deal with New Delhi might be imminent, but highlighted that India's historic policy of strongly protecting its market meant that reducing barriers would represent a major reversal.

"We continue to speak with our Indian counterparts; we have always had very constructive discussions with them," he said.

The comments indicate that India's hopes of securing an interim trade deal before the Aug 1 deadline are fading as New Delhi and Washington are yet to find a common ground on contentious issues. While India was among the first nations to approach the White House for trade talks earlier this year, it has recently toughened its stance in negotiations.

India's Ministry of Commerce and Industry didn't immediately respond to an email seeking further comment.

"They have expressed strong interest in opening portions of their market, we of course are willing to continue talking to them," Greer said. "But I think we need some more negotiations on that with our Indian friends to see how ambitious they want to be."

He spoke a few days after Indian Commerce Minister Piyush Goyal said he is optimistic that an agreement could be reached to avert threatened tariffs of 26%. Goyal insisted there aren't any sticking points in the US-India relationship, and said that immigration rules — including those around H-1B visas for skilled workers — had not come up in talks.

Greer did not say what would happen if no deal is reached with India by the White House's deadline. US President Donald Trump has touted zero tariffs in the preliminary agreements with the European Union and Japan, while promising to impose even higher duties on Aug 1 for countries that haven't cut deals.

Trump has separately threatened to hit countries like India and China with "secondary tariffs" for buying oil from Russia.

As part of its trade negotiations, India has expressed willingness to offer zero tariffs on some goods like auto components and pharmaceuticals, while barriers on sectors like agriculture and dairy remain red lines it won't breach in the final agreement, Bloomberg News reported earlier this month.

"The thing to understand with India is their trade policy for a very long time has been premised on strongly protecting their domestic market. That's just how they do business," Greer said.

"And the president is in a mode of wanting deals that substantially open other markets, that they open everything or near everything."

Slow business

The uncertainty on India-US trade agreement has slowed business activity in some sectors, with industries from gems to toys and textiles witnessing order suspensions.

Kanodia Global, a manufacturer and exporter of home fabrics and textiles to the US, said customers including Walmart Inc are turning cautious and holding out on giving large orders.

US buyers want shorter delivery time as they don't want their money stuck while the final tariff rate changes, said the company's director Ashish Kanodia. "Our orders are stuck in limbo. If certainty is there, we will be able to move forward."

Sabyasachi Ray, an executive director at The Gem and Jewellery Export Promotion Council, also expressed concern over weak business. "People are tired," he said. "We will be highly affected. But something has to come, so we will see."

Source: Theedgemarkets

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India Emerges as the Dominant U.S. Smartphone Exporter

India has, for the first time, overtaken China to become the leading exporter of smartphones to the United States, driven primarily by Apple’s strategic realignment of its supply chain. According to data released by Canalys, India-made smartphones accounted for 44% of all U.S. imports in the second quarter of 2025, compared to just 13% during the same period last year. This sharp increase representing a 240% year-on-year rise in shipment volume marks a significant reshaping of global electronics manufacturing.

In contrast, China’s share of U.S. smartphone imports has collapsed from 61% a year earlier to 25% this quarter. Vietnam has also outpaced China, now contributing 30% of shipments to the U.S. market. These figures indicate a broad regional diversification strategy among smartphone makers seeking to hedge against geopolitical and tariff-related risks.

Apple’s Relocation Strategy Accelerates Manufacturing in India

The main driver behind India’s export boom is Apple’s accelerated shift in assembly operations. Facing persistent trade tension and threats of higher tariffs from the U.S. government, Apple has reportedly intensified efforts to produce a larger share of its iPhones in India. Canalys analyst Sanyam Chaurasia confirmed this is the first instance in which India has surpassed China in smartphone exports to the U.S.

Apple is expected to manufacture up to one-quarter of all iPhones in India within the next few years. The company has already started assembling the iPhone 16 Pro model in India but still depends on China’s sophisticated infrastructure for premium models. This dual-location strategy illustrates the ongoing transition: while India is expanding capacity rapidly, it remains reliant on China for complex manufacturing processes.

Political Pressure and Tariff Risk Drive Realignment

Former President Trump’s tariff threats have amplified the urgency of Apple’s realignment. Although core products like iPhones and MacBooks currently enjoy exemptions from most tariffs, these have been described by U.S. officials as temporary. Trump had earlier imposed a 26% tariff on Indian imports much lower than the triple-digit rates on Chinese goods before pausing implementation until August 1.

The risk of further tariff escalation has pushed not only Apple but also competitors like Samsung and Motorola to explore Indian assembly lines. However, Canalys notes that their transition remains comparatively slow and less impactful than Apple’s.

Last-Mile Assembly Trends Gain Momentum

Companies are increasingly shifting final assembly to India as a way to localize production close to U.S. markets while avoiding the higher costs and risks associated with Chinese operations. Renauld Anjoran, CEO of Agilian Technology in Guangdong, confirmed that his company is preparing to trial production in India soon. Agilian is one of many mid-tier electronics firms adapting their footprint in response to both cost and policy shifts.

The decision to shift assembly lines does not yet indicate a complete decoupling from China. Instead, manufacturers are pursuing a dual-track strategy: maintaining China for complex, high-volume tasks while expanding capacity in India for simpler assembly and export tasks to the U.S.

Mixed Signals in Shipment Volume and Sales Forecasts

Despite India’s gains in shipment share, overall U.S. iPhone shipments fell 11% year-on-year in Q2 to 13.3 million units, reversing the 25.7% growth observed in Q1. Globally, iPhone shipments dropped by 2% to 44.8 million units. These declines underscore that increased export volume does not always translate into higher final sales and may reflect inventory management adjustments or weaker consumer demand.

Apple’s stock has dropped 14% so far this year, with investors increasingly concerned about both tariff exposure and mounting competitive pressures in smartphones and AI. The company’s manufacturing relocation, while proactive, is seen as a long-term strategy rather than a short-term fix to operational volatility.

The shift in U.S. smartphone import origins from China to India demonstrates a reshaping of global production networks. While India’s rise is tied causally to Apple’s relocation strategy amid U.S.–China tensions, the continued decline in total shipments suggests that consumer demand and geopolitical risk remain intertwined. India's position is growing, but it is still contingent on long-term investment in infrastructure and political stability. The structural transformation of global smartphone manufacturing is underway, with India taking a central role but not without significant reliance on legacy systems in China.

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Bond

Political Turbulence Heightens Investor Anxiety

The recent upper house election loss by Prime Minister Shigeru Ishiba’s ruling coalition has cast doubt over fiscal continuity. Opposition parties advocating debt-funded stimulus have gained ground, weakening the LDP’s control and putting Ishiba under mounting pressure to resign. Market speculation suggests a potential leadership shift as early as this Friday's parliamentary session or following the August 15 wartime commemoration. Regardless of timing, any transition could open the door for reflationary contenders like Sanae Takaichi, whose policies favoring aggressive spending and looser monetary policy are viewed warily by bondholders. Political uncertainty is already reflected in climbing long-dated Japanese Government Bond (JGB) yields.

While the BOJ is not expected to hike rates at this Thursday’s meeting, its quarterly outlook and Governor Ueda’s statements will be scrutinized for signs of normalization. The recent U.S.-Japan trade deal removes a key barrier to rate hikes, fueling bets that tightening may resume in October. If the BOJ signals further retreat from its bond-buying program, the Ministry of Finance will face the challenge of attracting new JGB buyers to replace BOJ demand. Already, Finance Minister Kato has acknowledged this gap and adjusted issuance strategies to shorter maturities to ease volatility. However, the persistence of bond selling ahead of political inflection points highlights market fragility.

U.S. Fed and Global Spillovers Add External Pressure

Beyond Japan, global bond markets await the U.S. Federal Reserve’s rate decision on Wednesday. Although a rate hold is widely expected, internal division is emerging. Governor Waller and Governor Bowman may dissent in favor of cuts, stirring uncertainty over the Fed’s forward path. Compounding this is President Trump’s political interference, including past threats to fire Chair Jerome Powell. Although Trump recently eased his rhetoric, any shift could sharply affect global rates. If Powell is replaced with a monetary dove, short-term yields might fall. Yet, the risk of eroding trust in U.S. fiscal discipline and dollar stability could spur long-term Treasury selloffs, lifting global yields and triggering a parallel rise in JGB yields.

Japan’s bond market is entering one of its most precarious periods in recent memory. Domestically, the threat of political regime change and potential BOJ tightening is reshaping yield curves. Externally, Fed uncertainty and U.S. political volatility are sending ripples across global sovereign markets. This week could mark a decisive point for JGB market stability. If political upheaval intensifies and BOJ rhetoric turns hawkish, bond volatility may surge. Conversely, tempered signals from both Tokyo and Washington could provide temporary calm but underlying cracks will remain unless new domestic demand for JGBs is secured and investor confidence is restored.

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