Else Beekman
US President Donald Trump is once again making headlines with his aggressive trade policies. In a move reminiscent of his first term, Trump announced significant tariffs on imports from Canada, Mexico, China, and even Europe. This decision could have far-reaching consequences for Spain and the broader European economy.
Financial analyst Juan Ignacio Crespo described it in La Sexta as a “geopolitical weapon.” Trump has introduced a 25% tariff on Canadian and Mexican goods, along with a 10% tariff on Chinese and European imports. These measures, aimed at protecting American industries, come at a time of economic uncertainty. The full impact remains unclear. However, Crespo suggests that the situation will initially be “a bit chaotic.”
Spain’s exposure to US tariffs
Spain, like many European nations, relies heavily on exports. To get an idea, in november 2024, the total export from Spain to the USA was approximately $1.534 billion . Key Spanish industries such as agriculture, wine production, and automotive manufacturing could be among the hardest hit. For example, Spain’s black table olive producers, already reeling from tariffs imposed during the first Trump administration, fear more are on the horizon. If tariffs are imposed on Spanish goods, businesses may struggle with declining demand in the US market, potentially leading to job losses and economic slowdowns.
During Trump’s first term, there were threats of similar tariffs, but many were never fully implemented. However, this time the situation appears more serious. With global markets already reacting cautiously, Spanish exporters are bracing for possible disruptions.
The US advantage
One of the reasons Trump’s trade policies may not backfire on the US is its dominant role in global trade and finance. According to Crespo, the US remains the key player in global capital movements, giving it leverage over other economies. The result? Investors worldwide—including from Spain—may increasingly look to the US as a safer and more profitable market.
Political motives behind the tariffs
Beyond economic reasons, Trump’s tariffs serve a broader political agenda. His administration has long pressured European nations to increase their defense spending, with Spain among those expected to contribute more. Crespo suggests that if Europe wants to maintain good relations with a second-term Trump administration, raising defense budgets could be a crucial step.
In 2024, Spain’s defense spending was approximately 1.28% of its GDP, which is the lowest among NATO countries. This equates to around €19.723 billion. Now, Trump has called for NATO members to increase their defense spending to 5% of GDP. This is significantly higher than the current NATO target of 2% of GDP.
Also read: How Trump’s tariffs hit Spanish exports with three regions at risk