In 2023, Spanish exports to the United States accounted for 4.9% of total exports and 1.25% of the country’s Gross Domestic Product (GDP). While Spain’s overall exposure to the U.S. market is relatively low, the impact of a potential tariff increase varies significantly across different sectors. The tariffs imposed by the United States on Spanish exports can differ considerably depending on the type of product.
Currently, the ad valorem tariffs applied by the United States to Spanish exports follow the most-favored-nation (MFN) regime. This non-discriminatory tariff is applied unless the product is subject to specific restrictions. A notable example was the tariffs imposed between October 2019 and March 2021 on certain Spanish agri-food products due to a dispute over state subsidies in the aerospace sector.
With the Trump administration proposing an increase in ad valorem tariffs to 10%, two key factors must be considered: the current tariff levels and the significance of the U.S. market for each product. By analyzing the impact of raising the tariff from its current level to 10%, the value of each product’s exports is assessed, and results are categorized based on multilateral trade negotiations under the World Trade Organization (WTO).
The sectors most vulnerable to this tariff hike include capital goods production (such as machinery, office and IT equipment, and electronics), minerals and metals, and chemicals. These industries face low existing tariffs and have high exposure to the U.S. market, making them more susceptible to the negative effects of a tariff increase. Conversely, the transportation equipment sector would experience a lesser impact, as many products in this category are already subject to tariffs above 10%. However, some items currently facing tariffs below 10% may see a moderate increase.
The direct economic impact of a 10% tariff increase is estimated at approximately €1.388 billion, representing 0.1% of Spain’s GDP. In a scenario where tariffs rise to 20%, the impact could reach €3.181 billion, or 0.2% of GDP. These estimates only consider Spain’s direct exports to the United States and do not account for indirect effects, such as the added value Spain contributes to other countries’ exports to the U.S. A key example of this indirect impact is the Spanish value added to German exports heading to the U.S. However, this effect could be partially offset by factors such as a potential depreciation of the euro against the dollar, the partial transfer of tariffs to EU export prices, and trade shifts to alternative markets.
Finally, it is important to note that if tariffs were uniformly raised on all countries exporting to the United States, the relative impact on Spain would be lower than in a scenario where targeted tariffs are applied. This is because relative prices among trade competitors would remain largely unchanged.
