Spain Vows to Support Those Affected by US Tariffs, Upholding EU Interests

In a significant move to address the looming trade tensions with the United States, Spanish Prime Minister Pedro Sánchez has reassured that his government will provide robust support to those affected by the impending US tariffs. This commitment comes as part of Spain's broader strategy to protect the interests of the European Union (EU) and its member states.

Context of the Tariff War

The recent return of Donald Trump to the US presidency has reignited concerns over trade policies, particularly the imposition of tariffs on EU imports. Trump's administration has threatened to impose a 25% tariff on steel and aluminium imports from the EU, among other measures. This move is part of Trump's "America First" trade policy, aimed at reducing the US trade deficit with Europe.

Spain's Stance and Support

Prime Minister Pedro Sánchez, in a recent statement, emphasized Spain's commitment to free trade and the need to defend EU interests. He highlighted that the EU has the "determination" and "tools" to protect itself from the adverse effects of US tariffs. Sánchez's government has proposed a significant increase in the EU's budget to enhance its resilience against such trade wars, suggesting an increase to at least 2% of the EU's GDP annually[3].

Impact on Spanish Exports

The Spanish Chamber of Commerce has noted that while the 25% tariff on EU steel imports could lead to a 10.4% decline in the total value of Spanish exports, the overall impact on Spain is not expected to be severe. Spanish steel exports to the US, for instance, totalled 264,809 tonnes in 2024, valued at $412.2 million. However, the tariff-rate quota (TRQ) system agreed upon by the EU and the US in October 2021 allows for 3.3 million tonnes of steel to be exported duty-free, mitigating some of the potential damage[1].

EU's Unified Response

The EU is preparing a unified response to the US tariffs, with Spain playing a key role. José Manuel Albares, Spain's Minister of Foreign Affairs, European Union and Cooperation, has warned that "nobody wins in a tariff war" and emphasized the importance of European unity in defending common trade policies. The EU is considering various strategies, including retaliatory measures and cooperation on issues like supply chain resilience and technology exports, to navigate the complex trade landscape[2][5].

Broader Economic Implications

The potential trade war between the US and the EU is expected to have far-reaching economic implications. According to economic simulations, reciprocal tariffs could reduce the GDP of highly exposed economies like Czechia and Hungary by nearly 1 percentage point by the end of 2027. For larger economies like Italy and Germany, the impact is estimated to be around 0.5 to 0.6 percentage points. Additionally, the tariffs are likely to increase inflation in the eurozone and dampen private investment[4].

Conclusion

As the trade tensions between the US and the EU escalate, Spain's government is steadfast in its commitment to support affected industries and uphold EU interests. With a focus on increasing the EU's budget and enhancing its defensive mechanisms, Spain and the EU are preparing to navigate the challenges posed by Trump's trade policies. For expats in Spain, this means a watchful eye on trade developments and a reassurance that the Spanish government is actively working to mitigate any adverse effects.