Spain’s Defense against Trump’s Tariffs

Protecting employees and businesses from Trump’s trade war is above partisan interests

This Thursday [May 8], Spain’s Congress of Deputies confirmed a decree for assistance to alleviate the effects on the Spanish economy of the tariff war declared by the United States. The government gained the support of the investiture bloc, with Podemos abstaining and the Navarrese People’s Union voting in favor of the decree. Only the Partido Popular and Vox [parties] voted against it, despite the express appeal made to political groups by family businesses to respond in a unified manner to Donald Trump’s economic assault. But this did not happen. Faced with the need to protect business owners and the self-employed, they inexplicably chose a short-sighted partisanship despite such exceptional circumstances.

On April 2, Trump announced a trade offensive against all of the countries with which the U.S. has a negative credit balance, which meant a 20% tariff in the case of the European Union. Despite the 90-day pause that Washington and Brussels gave themselves to negotiate, a general tariff of 10% on all European products headed for the U.S. market is already in effect, as well as another tariff of 25% on steel, aluminum and cars. This tariff bomb that was unilaterally detonated by the White House has added a dose of uncertainty to the immediate horizon and is already determining the consumption and investment decisions of families and businesses. Hence the urgency to adapt to the situation with measures that ensure activity is maintained.

Even though little more than half of the 14,100-million euro package approved on Thursday is new, the Response and Business Revival Plan proves agility on the government’s part to repair parties in the face of unforeseen situations and soften the impact of the crisis through measures which have recently demonstrated their efficiency. The government promised to regularly assess the effects of the tariff increases and determine future direct assistance for maintaining jobs, as demanded by the Esquerra Republicana de Catalunya Party. This also includes the start-up of a similar mechanism to that of ERTE, Spain’s furlough scheme, to support personnel in the hardest-hit businesses, somewhat similar to what they did during the pandemic.

Despite the lack of support from the PP and Vox parties, Spain’s treasury minister, Carlos Cuerpo, who has become one of the government’s most open-minded and decisive voices, left the door open to future negotiations with the opposition in the event that Trump’s trade policy forces them to adopt new measures. This is the right thing to do, since unpredictability has become one of the hallmarks of the current Republican administration, and it would be a good idea to strive to achieve the greatest possible unity in these circumstances.

Brussels is also preparing itself for whatever the tariff war may bring. Although Ursula von der Leyen’s team maintains its commitment to negotiating, the EU has begun to solidify its plans in the event that the dialogue fails. This Thursday, Brussels published a new list of 2,000 U.S. products that would be affected by Trump’s commercial drift.

Although the government and the European Commission are right to act now, it would be ideal if both the trade deal closed this week between the U.S. and the United Kingdom, and the meeting between the Trump administration and the Chinese government that will take place starting today in Geneva, meant that the occupier of the White House at the very least came to his senses. Even if only because of the high stakes for consumers and businesses — in Spain and in Europe in general, but also in the United States.