Socialist Party leader proposes mitigation strategy for the effects of Trump's tariffs

Given the US announcement of 30% tariffs on European products, Portugal must draw up a plan to mitigate the negative impacts, a plan defined in conjunction with the sectors most exposed to that market, argues the secretary-general of the Socialist Party. With over €5 billion exported to the US in the last two years, trade relations with that country have been growing, becoming even more important for some sectors, such as pharmaceuticals and machinery.

Donald Trump once again sent shockwaves through the global economy by announcing a 30% tariff on European goods imported into the US starting August 1st, marking a new chapter in the tariff escalation Washington has been promoting since the Queens businessman returned to power. Portugal isn't even among the countries with the most significant direct exposure among EU member states, but the importance of the North American market has been growing, so the government must work to mitigate the effects of this strategy, argues José Luís Carneiro.

"Based on this decision, the government must meet with representatives of the most affected sectors, including textiles, clothing, footwear, and agri-food, and establish a strategy to mitigate the direct and indirect effects," the Socialist Secretary-General told JE. Essentially, a response "similar to what was done during Brexit," he summarizes.

Upon the United Kingdom's exit from the EU, the Portuguese government launched a €50 million package to support companies exporting to that market, aiming for diversification. Special corridors were also created for British tourists, given their weight and importance in the national tourism sector, one of the most important for the Portuguese economy in the last decade.

Previously, the socialist leader had warned of a possible loss of 30% of the growth forecast for this year and half of the forecast for 2026, given the negative effects on the European economy. Similarly, Barclays was one of the first financial institutions to put forward estimates for the impact of this US policy on Europe, anticipating effects of this magnitude with European retaliation.

TwentyFour Asset Management's analysis is even less optimistic, pointing to a recession in the eurozone as early as next year, as a result of these 30% tariffs.

More than 5 billion euros affected

With €5.3 billion worth of goods exported to the US in 2024, Portugal had been experiencing sustained growth that placed the world's largest economy as its fourth-largest importer. This trend has been repeatedly emphasized in recent years, particularly for sectors such as pharmaceuticals and automotive, which had been gaining market share.

According to INE data, in 2024, Portugal exported more than €1.2 billion worth of pharmaceutical products to the North American market, a slight decrease from the €1.3 billion the previous year and a significant share of this national sector, which exported €3.4 billion. Looking at the chemical sector as a whole, which includes the pharmaceutical sector, total exports reached €5.9 billion—meaning that almost 20% of this export was related to pharmaceutical sales to the US.

Exports of mineral products, including fuels, are next on the list, with €1.1 million of the €6.5 billion exported by the sector going to the USA.

Machinery, equipment, and electrical equipment follow, although they are already far from the values of the other two sectors: with 529 million euros exported to the US, that market does not even reach 5% of the more than 11.8 billion sold abroad by this sector in 2024.

Sectors such as steel and aluminum, subject to specific 20% tariffs, do not have the US as one of their most relevant markets, given that aluminum sales to that country do not even reach 3% of the 977 million euros exported in this sector. Similarly, automotive component manufacturers will not see major direct impacts, given that only 22 million euros of the 9.6 billion euros exported are destined for the US.

The effects on the automotive sector will be felt indirectly, given the importance of the US in the value chains of German and French companies, especially those that have significant suppliers in Portugal.

On the other hand, other less significant segments of the national economy have the North American market as their main customer. The most obvious is arms: of the nearly 85 million euros exported in 2024, 60.3 million euros were destined for the US, or 71%.

Also noteworthy is the 435 million sold to the US by the textile industry, a considerable amount in absolute terms for the national reality, although less than 8% if we look at exports from this sector to the entire world.