“The Spanish economy, one of the most open in Europe (40%), will have to open up to new markets in Asia and Africa.”
Trump's second presidency (Trump 2.0) has brought additional disruption to the current geopolitical and global economic landscape. The whims of the narcissistic 47th president of the United States have turned political and economic strategic alliances upside down. We will see the global and individual results as uncertainties become clearer in their effects and consequences. Among the first Trumpian decisions is the return of mercantilism as a negotiation and propaganda strategy. TARIFFS is one of the key words for the 47th president. The application of selective and hefty tariffs on various countries and products constitutes one of the pillars of Trump’s neo-politics to make America great (again). The governments of China, Canada, Mexico, and the European Union are the most affected by the new tariffs, and in all cases, the response has been twofold: to offer negotiations and to respond with equivalent measures.
Spain appears at the end of this equation, impacted more by the double round of consequences than by direct effects. Spain's trade balance with the US is favourable to them (€11 billion annual deficit over the last three years) due to recent and substantial purchases of liquefied gas. According to Trump's deceptive logic, the US is stealing from Spain. This is false, but it is his logic. However, the tariffs Trump threatens would have some (few) direct negative effects on Spanish exports to the US, but the worse effects will be the second-round impacts due to reduced growth (and purchases) from our main clients (the EU partners). Foreign trade has been one of the central assets of the Spanish economy for the past few years. The increase in the export orientation of Spanish entrepreneurs is spectacular, with the character of an “event”. In fact, the Spanish economy is one of the most open in Europe (40%), which has the upside of greater growth and the downside or risk of regression in recessionary situations of the other client countries.
A trade war with symmetrical increases in tariffs and heightened protectionism goes against exporting economies, and Spain is very much one of them today. Exporting is very good, generating positive foreign trade balances is good, but it can cease to be so in a situation of widespread recession and heightened protectionism. The US buys little from Spain (less than 5% of our exports, capital goods, manufactured products, and agricultural products: wine, oil, olives, sweets…). US imports to Spain account for 7% of the total, mainly oil and liquefied natural gas. In any case, one cannot imagine a bilateral relationship between the US and Spain outside of the European Union, which enjoys a very favourable and irritating balance for Trump, leading him to his verbal excesses against his Atlantic partners. The message for Spanish exporters is clear; they will have to open up to new markets in Asia and Africa, increasingly contested by traditional exporting countries.♦