Spain | The impact on the economy of the increase in US trade tariffs

It may well be negative in the short run, although it should be cushioned by the relatively low direct exposure of the Spanish economy to trade with the US. In the medium term, the outcome will be determined by the goals set by the new US President and the economic policy responses, both in the eurozone and in Spain.

Key points

• Key points:
• According to simulations run by BBVA Research, a 10% increase in US tariffs on imports from the EU could knock around 1.5% to 2.0% off the eurozone’s GDP over the next few years.
• Spain is likely to be less affected, seeing as though exports of Spanish goods to the United States account for barely 1% of its GDP, while for the eurozone, this figure climbs to almost 3%.
• That is not to say that there will not be companies, sectors or regions that will genuinely suffer from these changes. For instance, within the food sector, exports of oils and fats to the United States account for almost 30% of the total figure, and the US happens to be one of the main markets for Andalusia.
• Looking at semi-manufactured goods, exports of chemical products to the US account for almost 50% of the total, and notably 40% of total sales of this type of goods are made by Catalan companies.
• In the absence of sufficient coordinated action, higher tariffs will become a further obstacle that could structurally limit the improvement of living conditions for European citizens.

Authors

Geographies

Topics

Tags