The Shadow of Tariffs: Preparing for a Shifting Trade Landscape

Just weeks after Donald Trump’s inauguration as the 47th President of the United States,concerns are mounting in Catalonia regarding the future of trade relations. Former European Trade Commissioner Cecilia Malmström cautioned Catalan business leaders to prepare for potentially challenging times, alluding to the possibility of tariffs on foreign goods entering the US, a policy repeatedly emphasized by the new governance. While extreme measures like the hypothetical 200% tariff on european wine and champagne have not materialized, the underlying threat remains.

The mere anticipation of these tariffs has already sent ripples through sectors heavily reliant on the American market. industries dealing with steel and metal products, already grappling with a 25% increase in export costs from previous tariffs, are particularly vulnerable. Though, the broader concern is that the most significant impacts are yet to be felt.

If something like this happens in the chemical or pharmaceutical industries, it will be a real problem.

Key Sectors at Risk: A Deep Dive into Catalan Exports to the US

Catalonia’s economic ties with the United States are considerable.In 2024, the Catalan chemical industry exported over €1.1 billion worth of goods to the US,representing a quarter of all Catalan exports to the country (€4.3 billion), according to data obtained by Archynetys. Pharmaceutical products (€707 million, 16% of the total), machinery and equipment (€479 million, 11%), the agro-food sector (€460.3 million, 10.6%), and metallurgy and metal products (€224 million, 5.2%) follow closely behind.

However, export volume alone doesn’t paint the whole picture. the true vulnerability lies in the dependence of specific sectors on the US market. As Cristina serradell, director of the International Business Unit of Acció, explains:

If a market is not very vital, you can quickly diversify and ensure that [the tariff increase] does not have a very high impact on the results account. The problem is when a very critically important percentage of your billing depends on a country.
Cristina Serradell, director of the International Business Unit of Acció

Vulnerable Industries: Perfumery, Cosmetics, and Agro-Food

From this perspective, the perfumery and cosmetics sector appears particularly exposed. Including both finished products (perfumes, creams, etc.) and active ingredients, this sector exported approximately €660 million to the US, accounting for 15% of all Catalan exports and 12% of the sector’s total exports. This significant reliance makes it highly susceptible to tariff-related disruptions.

Pharmaceutical products also face considerable risk, with 8% of their exports destined for the US, particularly human blood products (over 14% to the US) and medications. Machinery, with dishwashers being a prime exmaple (18% of exported models end up in the US), completes the list of the most vulnerable sectors.

The agro-food sector also warrants close attention. While individual food products may not dominate the overall export figures,the US is a crucial partner for several key items. In 2024, 15% of Catalonia’s olive oil exports, nearly 13% of its wine, 11% of its fish, and a notable 28% of its juices and vegetable extracts were shipped to the United States.

Trump’s Trade Agenda: What’s on the Horizon?

The exact nature and scope of potential tariffs remain uncertain. President Trump is reportedly considering a 25% tariff on cars, medicines, semiconductors, and agro-food products from all countries, effective April 2nd. Furthermore, an additional 25% tariff on all goods originating from the European Union is also under consideration.

In response to this uncertainty,Acció is working directly with individual companies to develop contingency plans. This involves assessing their exposure, exploring alternative markets, and preparing for potential disruptions. A key piece of advice is to maintain close interaction with distributors and clients in the US to gain real-time insights into market conditions.

What affects [businesses] most is the uncertainty,because there are people who were considering doing certain operations that they are now freezing.

Potential Economic Repercussions for Catalonia

The underlying concern is the potential impact on the Catalan economy as a whole. A report by Acció, published in November 2024, already anticipated potential damage to trade relations and the emergence of inflationary pressures, negatively affecting competitiveness, investment, consumption, and overall economic growth. The report estimated that a 10% tariff could reduce Catalonia’s GDP by two-tenths of a percentage point. Current estimates suggest that a 25% tariff could increase this reduction to five-tenths of a percentage point.

The United States has become an increasingly critically important trading partner for Catalonia.Following the pandemic and the war in ukraine, which substantially altered global trade flows, the US has risen from Catalonia’s seventh to its fifth-largest trading partner, surpassing the United Kingdom and Portugal. Trade between the two regions has surged from €6.3 billion in 2019 to over €10.1 billion in 2024. Exports from Catalonia to the US alone have increased by 78% in the last five years, reaching €4.3 billion in 2024.