The US suspends its funding to the World Trade Organization

BarcelonaThe United States has paused its contributions to the World Trade Organization (WTO), three trade sources told Reuters, as the Trump administration steps up efforts to cut government spending. The Trump administration is withdrawing from global institutions it sees as at odds with its economic policies and plans to leave some, such as the World Health Organization, and has cut contributions to others as part of a broad review of federal spending.

Indeed, the WTO was already damaged by a US move in 2019 during Trump's first term, when it blocked new judicial appointments to its top appeals court, leaving its key dispute settlement system only partially functional.

The Geneva-based trade watchdog had an annual budget of 205 million Swiss francs (more than 214 million euros) in 2024. According to public WTO documents, Washington was due to contribute about 11% of its share, according to the levy system.

A US delegate, according to Reuters, told a WTO budget meeting on March 4 that payments to the 2024 and 2025 budgets were on hold pending a review of contributions to international organizations and that he would inform the WTO of the outcome at an unspecified date. A third trade source, according to the agency, confirmed his account and said the WTO is preparing a "Plan B" in case the funding pause is extended, without giving further details.

The automotive sector calls for urgent negotiations

Donald Trump's economic strategy has caused a new shock to the stock markets. 25% tariffs on cars and auto parts not made in the U.S. The tariffs imposed by the US president on Thursday, which are expected to begin applying on April 2, have already caused a drop in the shares of the industry's major manufacturers. The sector's most prominent brands in Europe, Japan, and South Korea saw significant declines on the stock market on Thursday. US brands already fell on Wednesday when Trump announced the tariffs.

In fact, these tariffs are not only for cars; they also affect components, and consequently, also manufacturers in the United States itself, which use parts from other countries to manufacture their cars. In fact, the Spanish automotive industry does not export cars to the United States—Cupra is considering entering the US market by the end of the decade—but the tariffs on components could affect the Catalan and Spanish auxiliary industries in two ways: on the one hand, due to sales to US manufacturers, and on the other, the Catalan and Spanish auxiliary industries in the sector.

"Limited" impact in Spain

However, the Minister of Economy, Trade and Enterprise, Carlos Cuerpo, and the Minister of Industry, Jordi Hereu, believe that Spain will be affected to a "limited" extent by the US tariffs on foreign vehicles, and estimate that "around 1% to 2% of total Spanish exports" will be affected. The main sector that could be most negatively impacted is component production, where "Spain is a world leader in production," and indirect exposure is expected to affect this market, as Spain sells parts to countries such as France, Italy, and Germany, which have a significant presence in the US market.

"Many of the vehicles exported from the main exporting countries to the United States, such as Mexico and Germany, among others, also contain components from the Spanish industry," Cuerpo noted. "We are convinced that this is not the solution for the sector, neither in the United States nor in the rest of the world. We have said this for many months, this type of measures, a race of protectionist initiatives, will only have negative effects or impacts for everyone, starting with the country that imposes them," said the Minister of Economy at a conference.Eldiario.es.

"We will respond in the right measure, in an agile manner, of course, and also in proportion to the measures that are imposed, because we also have the tools to do so. From Europe, sectors, industries, and also consumers will be protected, and the message we prefer to convey will be put forward. Cuerpo has announced that in the coming days both he and the Minister of Industry, Jordi Hereu, will meet urgently with the sector. The Minister of Finance, María Jesús Montero, has expressed that the Spanish government will support the sector. The general director of the Spanish manufacturers' association, Anfac, José López-Tafall, has asked the Spanish government and Brussels for a specific plan for the automotive industry to deal with the tariffs.

Germany calls for a "firm response"

The German Automotive Industry Association (VDA), the employers' association in the country most affected by Trump's tariffs, has demanded "urgent negotiations" between the European Union and the United States to reach a trade agreement. VDA President Hildegard Müller said the tariffs "send a disastrous signal for free trade." Outgoing German Minister of Economic Affairs and Climate Change Robert Habeck stressed the importance of the European Union providing a "firm response" to the tariffs announced by Trump. "It must be clear that we will not back down. Strength and self-confidence are necessary. Likewise, we will support the European Commission in continuing to find a solution in negotiations with the United States that avoids a tariff spiral," Habeck argued.

The German leader, who is part of the Greens alliance, added that "the announcements of high tariffs on cars and car components are bad news for German vehicle manufacturers, for the German economy, for the EU, but also for the US." "They interfere with global supply chains and will also make American cars more expensive. Prices will continue to rise in the United States," he warned. He also noted that the tariffs "are not a surprise" and that Brussels has prepared for the measure with the member states.