Even if the polls gave a technical tie between the Republican candidate Donald Trump and the Democratic candidate, Kamala Harristhe victory of the former US president in the 2024 elections was obvious. Four years later, he returned to direct the economic policy of the world’s largest economy.
Looking back, Donald Trump was not exactly an “ally” for Spanish business interests. Because its protectionist and isolationist policy has affected, for example, the automobile industry, the pharmaceutical industry or the agri-food sector.
With regard to the latter case, it should be remembered that Spain exported 70,000 tons of olive oil to the United States during the first half of this year. In fact, it is the first destination for olives made in Spain (represents 35% of total exports).
Looking back at Donald Trump’s previous term, one of the measures he promoted was the imposition of 14% customs duties on all imports. Among them, Spanish olive oil.
We then show what the consequences of Donald Trump’s economic policy in the United States will be on the European Union (EU) and Spain.
What will Donald Trump’s economic policy be?
The man who will be president of the United States again for the next four years said it very clearly at a campaign event in Pennsylvania: “They don’t buy our cars, they don’t buy our agricultural products. They sell millions of vehicles in the United States. “They are going to have to pay a high price.” And he was referring to the European Union.
He notably said this while pointing the finger at the European automobile industry. But that covers the rest of the sectors. Because his idea is to implement a customs duty of between 10% and 20% on all imports. In the case of China, this percentage would increase to 60%.
If we translate it into euros, and for the specific case of the EU, The cost would be around 180 billion. This is what the German Economic Institute estimates. Last year, the EU exported 502.3 billion euros worth of goods to the United States. Or a fifth of total non-European exports.
Machinery and vehicles represent the largest sales from the EU to the United States (207.6 billion euros). Next come chemical products (137.4 billion euros) and other manufactured products (103.7 billion euros). These three blocks represent almost 90% of exports.
In the case of Spain, it was the seventh exporting country to the United States in 2023: 18,904 million euros. In their case, the best-selling goods were machines and mechanical devices. The automobile occupies fourth place.
In total, around 28,000 Spanish companies would be affected by the economic policy of the new American administration.
What will happen to the dollar and the euro?
Analysts are clear: Donald Trump will resort to protectionism, tariffs and the renegotiation of trade agreements to reduce the country’s deficit. Also that the dollar will gain muscle.
And with a stronger dollar and a suffering European economy, the European Central Bank (ECB) would have no choice but to cut rates. Will they reach zero in 2025? Quite the opposite of its American namesake: the Federal Reserve could raise them.
Result ? A weaker euro. This would have its positive and negative sides. Exporting companies could sell more, but this would increase import costs. There, above all, it would affect the energy that Spain buys outside our borders, and which is paid in dollars.
