A tariff war between the EU and the US is threatening to buckle one of Greece’s most buoyant export sectors, which survived a decade of economic crises, but possibly not US President Donald Trump.
The Trump administration’s decision to impose an additional 25 percent tariff on a range of EU products in retaliation for EU aircraft subsidies, hits products from Scotch to Italian cheeses and French wines.
In Greece, its prized canned peach.
Photo: Reuters
Greece is the world’s biggest exporter of tinned peaches with about one-fifth of its 250,000 tonnes annual production absorbed by the US market.
Formerly subject to an import levy of 18 percent, the new tariffs — part of WTO-authorized countermeasures to Airbus subsidies — would increase the total import duty to the US to 43 percent.
The people of northern Greece are not impressed.
“Trump would do well to behave himself and let us get to work so we can have a livelihood,” peach farmer Tasos Halkidis said. “We don’t want this tariff business.”
The fertile plain straddling the regions of Imathia and Pella in central Macedonia is one massive peach orchard. A sea of pink greets visitors in the spring, when the peaches are in bloom.
Standing in a huge warehouse piled high with millions of aluminum cans, 63-year-old Kostas Apostolou, head of the Greek Canners Association, said the dispute is threatening their livelihood and would potentially shut them out of their biggest market.
“Why are they punishing us?” Apostolou said.
The increase in tariffs came into effect on Oct. 18, just as Greeks readied to ship 50 million tins to US markets.
Many customers there — mainly catering companies that supply hospitals, schools and the military — have either canceled orders or have said they would not be prepared to pay for any tariff increase, producers said.
“Suddenly there was this [trade] war... We could never imagine that this could affect our jobs here in this small area,” Apostolou said.
Stuck with excess supply, producers are also uncomfortably aware how their production lines are tailored to the US market. The sector is saddled with 3kg tins aimed at the US, which cannot be sold in Europe, Asia or Latin America where 1kg tins are dispatched.
The Canners Association and other industry experts estimated the loss of income from the US market at about US$50 million — a small amount in terms of international trade, but vital for one of the poorer regions in Greece, with unemployment at 20 percent.
They are worried that resulting excess product would lead to a collapse in prices and unemployment would jump.
The heart of Greek peach country is planted with millions of trees in an area of more than 20,000 hectares.
About 10,000 small farms and 10,000 employees work for 17 can factories in the area, with the peach crop giving life to the wider Imathia and Pella regions.
“It’s a shock,” said Eleftherios Saitis, who built one of the first can factories in the early 1970s.
The sector is already reeling from the impact of a Russian embargo on the EU fruit and vegetable sector imposed in 2014. Farmers worry this might be the final blow.
“Now with the tariffs from the United States, it will be a very big hit, it will be a catastrophe,” Halkidis said.
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