Trump’s 25% tariffs threaten Tunisia’s olive oil exports

Olive oil is one of Tunisia’s biggest exports to the United States, generating about $223 million in 2023 — nearly 75% more than its fertilizer exports — according to Trading Economics, cited by Arabian Gulf Business Insight (AGBI).

Last week, the Trump administration announced a new 25% tariff on Tunisian goods, a move expected to hit the olive oil sector hard.

Sahar Mechmech from the Tahrir Institute for Middle East Policy warns the tariff will squeeze already slim profit margins. “They’ll most likely have to pass the cost to consumers, affecting their sales,” Mechmech told AGBI.

While the U.S. market makes up just around 3% of Tunisia’s overall exports, it offered valuable potential for growth. Now, combined with the European Union’s strict olive oil import quotas protecting domestic producers, Tunisian exporters are left with limited expansion opportunities, Mechmech says.

“Some exporters may try to absorb the tariff or find new markets, but most will see U.S. sales shrink,” added Zaid Alshaalan, an economic researcher at Tunisia’s IACE think tank.

Other sectors, including textiles, dates, and machinery, are also expected to be affected. Tunisia’s lack of a free trade deal with the U.S. and high tariffs on American goods made it a target, Alshaalan said.