The guide to understanding who keeps, how much is collected, and what is done with EU tariff revenues

Madrid/BrusselsBeyond the measures that the Spanish government wants to deploy to help the sectors affected by Donald Trump's tariff policy, Pedro Sánchez's executive also seeks to influence the Commission's response Europe in the trade war. For example, it wants the EU executive to approve a European fund with part of the money raised from tariffs applied by the European Union. The idea is for this money to serve as a lifeline for the most affected companies.

But why is the Spanish government looking to Brussels in this case? The key lies in how tariff collection works and who has the powers to do so.

Who decides the tariffs applied to the EU?

The European Commission has jurisdiction over international trade and decides which products and countries receive tariffs. Therefore, they are not the responsibility of state or regional governments.

Customs duties imposed by Brussels on products imported into the European Union "are applied equally to all member states," explains Antonio Llobet, president of the General Council of Customs Agents, in a statement to ARA. For all these reasons, tariffs are currently the only traditional own resources in the European Union budget. In fact, they have been since 1970.

What role do the member states play?

The role of Member States is limited to being responsible for tax collection in accordance with European standards. Countries are required to have a control infrastructure to ensure that customs authorities carry out collection properly.

Furthermore, as with all decisions made in Brussels, state governments are consulted and can influence EU decisions on international trade. In fact, the European Commission requires the affirmative vote of a qualified majority of European partners—at least fifteen countries representing 65% of the total EU population—to be able to apply, for example, new tariffs against the United States.

How many tariffs are in force?

"In international trade, there are millions of different products," notes Llobet. "Making a complete list of [European] tariffs is difficult for various reasons: technical, political, and economic," adds the president of the customs agents. The variety of products on which the European Commission applies tariffs is immense. It must be taken into account that they are not applied to a generic good, such as meat, but rather that within a product like viands, there are multiple tariffs. "Many products can have different tariff codes depending on quality, presentation..." adds Llobet. This means breaking down the product into many characteristics and, therefore, into different tariffs. It must also be taken into account that tariffs are constantly changing, many of them linked to political decisions.

Sources from the Tax Agency indicate that, in any case, a distinction can be made between two main types of EU tariffs: conventional tariffs and so-called "anti-dumping" tariffs. The former are the best known and are applied to a specific product, for example, as a percentage. In contrast, so-called "anti-dumping" tariffs are less well-known. The European Union applies them when it detects that the selling price of a product to be imported is lower than the cost of production. They are typically implemented after a complaint or claim from an economic operator and provided the EU has been able to confirm whether the cost of production is higher than the cost of sale. "It is considered an unfair practice because it can affect domestic producers who cannot compete with such low prices," notes Llobet.

Does all the money go to the European budget?

Not all the money collected from tariffs goes into the EU budget. Starting in 2021, and initially only until 2027, Member States keep 25% of what they collect. This is basically a "reward" in exchange for managing the collection. The remainder (75%) must be sent to Brussels through monthly payments. The European Commission itself will have the power to decide its use: the money can fund programs such as the Common Agricultural Policy (CAP) and cohesion or development funds, among others.

The EU executive maintains that the 25% that countries keep should not only cover collection costs, but also serve as an "incentive to ensure diligent collection of the amounts collected." This task is carried out by the Tax Agency through customs agents.

How much money is collected?

According to the European Commission's own calculations, €20.119 billion was received through this channel in 2024. This figure represents just over 10% of the total annual budget of the European Union, which last year was €189.4 billion. However, if Brussels ends up applying countermeasures in the United States In response to the trade war launched by Trump, these revenues could grow considerably. According to sources from the European Commission, the EU would go from collecting €7 billion to €81 billion just from customs duties on US products. "The increase in revenue is massive," the same sources point out.

During the same fiscal year, Spain collected €2.628 billion from imports from outside the EU on which some type of tariff was imposed, according to data from the Tax Agency. However, it should be noted that by keeping only 25% of the money Spain collects through these taxes, the Spanish treasury will receive around €657 million in tariffs in 2024.

Is the European fund that Spain proposes possible?

The European fund proposed by the Spanish government is not yet fully on the table, and for now, Brussels is not focusing on subsidizing potentially affected sectors, but rather on regulations that protect European industry from attacks from the White House. In this regard, in addition to tariffs against the US, the European Commission has limited the maximum amount of steel and aluminum products that can be imported from the EU, presented a plan to protect the wine sector, proposes prioritizing European companies in public tenders, and, among other things, intends to boost European industry by purchasing weapons manufactured in Europe.