Spain's Agricultural Sector Reacts to Trump Trade Threats and Domestic Weather Disasters

Spain's olive oil sector is sounding alarms over U.S. trade threats, with the country's second-largest export market at risk.

• The government, led by President Pedro Sánchez, is considering relief measures to mitigate the economic impact of the U.S.-Iran tensions.

• Andalusia, Spain's leading agricultural region, is reorganizing its budget to support farmers and improve sustainability following recent weather disasters.

Spain's olive oil producers, whose exports to the U.S. reached nearly 800 million euros in the 2024-2025 season, are deeply concerned by Donald Trump's announced trade restrictions. U.S. imports of Spanish olive oil account for one-third of the country's total consumption, making it a critical export market. The recent announcement has already led to strategic delays, such as Dcoop's pause on acquiring full control of U.S.-based Pompeian.

President Pedro Sánchez has signaled his government's intention to provide aid to households, businesses, and workers affected by the geopolitical tensions in the Middle East. The president criticized U.S. military cooperation with Israel and reiterated Spain's commitment to international law and diplomacy.

Meanwhile, Andalusia continues to grapple with the aftermath of severe weather events that have affected over 33,000 farms and caused estimated losses of 3.5 billion euros. The government has allocated 1.971 billion euros for modernization and support, with a focus on water efficiency and sustainability. However, some regions, like Granada's affected areas, are still awaiting promised aid, prompting calls for policy adjustments and greater equity in relief distribution.

What Are the Immediate Risks to Spain's Agricultural Exports?

The potential U.S. trade restrictions could significantly disrupt Spain's agricultural exports, especially olive oil and table olives, which are major contributors to the country's agrarian economy. Spain's olive oil exports to the U.S. account for 16% of its total exports, and table olives make up 17% of the exports from Andalusia to the U.S.

The olive oil industry has already demonstrated its sensitivity to geopolitical risks, as seen during the U.S.-Iran tensions and the Trump administration's prior olive oil tariffs, which had been partially revoked earlier. The new trade threats introduce additional uncertainty for the sector.

How Is the Government Responding to Weather-Related Agricultural Crises?

Andalusia's government has prioritized modernization and resilience in the agricultural sector. A budget reallocation includes nearly 1 billion euros to support affected farmers and improve infrastructure. Initiatives like Plan Parra and Plan RegadíA emphasize water efficiency and digitalization.

However, cooperatives in Granada and surrounding areas have highlighted a gap in aid distribution, as certain regions were excluded from recent government aid packages. These cooperatives, representing 17,625 members and generating 222 million euros annually, have demanded policy reviews and threatened protests if no resolution is reached.

What Broader Economic Implications Are Being Considered?

The government is assessing the broader economic impact of the U.S.-Iran tensions and their potential effects on Spain's economy. President Sánchez has emphasized a diplomatic approach and is exploring targeted aid for affected sectors.

The situation echoes the economic turbulence seen during the Ukraine conflict, but current assessments by the Ministry of Agriculture suggest the impact remains less severe. Nevertheless, the sector remains cautious, as uncertainty in global markets could lead to volatility in trade and investment.

Spain's agricultural sector is facing a dual challenge: domestic weather-related disruptions and international trade risks. The government's efforts to provide relief and modernize the sector will be key in stabilizing the economy and protecting export markets from external shocks.