The State will mobilize 14.1 billion euros in response to Trump's tariffs.

MadridThe Spanish government is moving to minimize the effects of Donald Trump's new tariffs on the Spanish economy. This Thursday, Pedro Sánchez announced the launch of a "trade response and relaunch plan" that aims to mobilize up to €14.1 billion to protect businesses and workers in the sectors most exposed to the trade war. "The United States has decided to unilaterally attack the [trade] link with an unprecedented package of tariffs. It's a return to 19th-century protectionism, which is not intelligent in a globalized world," the Spanish president lamented.

"Spain will have a double umbrella," Sánchez said during a speech at the Moncloa Palace before business leaders and employers' associations from those sectors most sensitive to the new tariffs. The Spanish president thus referred to the measures that Brussels is already studying as a response to Trump and which, in the words of the President of the European Commission, Ursula von der Leyen, will be of "immense consequences". Likewise, the Spanish government, but also Brussels, is balancing between anticipating a harsh response to Trump and negotiating to rectify the situation: "We ask Trump to reconsider and sit at the negotiating table," said Sánchez.

Representatives from the automotive, steel, aluminum, and agri-food sectors, particularly the wine and oil sectors, attended Thursday's meeting. The weight of Spanish exports to the North American country was €18.9 billion in 2024, representing just under 5% of total sales of goods abroad. In addition to industrial machinery, sectors such as semi-manufactured goods (mainly chemical products) and food, especially oils and fats, as well as wine, stand out. The territorial component must also be taken into account. The Basque Country, for example, could be more affected by machinery sales, while Andalusia and Aragon would be penalized by agricultural activity.

Redirect existing items

Of the 14.1 billion euros the central government seeks to mobilize, 7.4 billion euros are new financing, while 6.7 billion euros are part of existing funds. In fact, some of these funds were already intended to provide a boost to certain sectors currently affected by tariffs, such as the Moves III plan (400 million euros) to aid electric cars. Other existing funds will be redirected.

The pillars around which this response plan will be organized are twofold: one to protect companies and workers most likely to be affected by the trade war, and the other to reorient production capacity. The latter involves opening up to new countries—Sánchez referred to those that "respect the interests and share the values [of Spain and Europe]" and, in fact, the State has long insisted on strengthening ties with Latin America, although it is also looking toward Asia. "The automotive industry can help other sectors in which Europe plans to invest heavily in the coming years," the Spanish Prime Minister stated. In countries like Germany, this sector has already signaled a shift toward defense.

Sánchez has assured that some of the measures to protect businesses and workers will be implemented "immediately" because they only need to be reoriented. Thus, for example, the State will leverage the agreements already established between the ICO and banks to launch two €6 billion guarantee lines so that the most affected companies have rapid access to financing.

Regarding measures to help transform the activity of some sectors, €5 billion will be redirected from the Recovery Plan, €2 billion will also be allocated to credit insurance and export risk coverage, and another €500 million will be allocated to reindustry.

Permanent contacts

The Spanish government will also establish a permanent bridge with social partners, unions, and employers' associations, while the Minister of Economy, Carlos Cuerpo, will be in charge of coordinating with the autonomous communities and political groups in the Congress of Deputies, where he is scheduled to appear. The Minister of Economy will convene a sectoral conference with the regional governments to address the trade conflict and will hold a round of consultations with the political parties.

The tone within the PP has, so far, been in line with that of the Spanish government. From the economic forum Wake up, Spain!, its president, Alberto Núñez Feijóo, has celebrated that the State executive is preparing a response plan to Trump's tariffs with the help of social stakeholders, although he has asked that the opinion of the autonomous communities (most of which are governed by the PP) be included.

All in all, the trade war started by Trump distances the PP from its partner in the majority of autonomous communities, Vox, which, through its leader, Santiago Abascal, has accused the PP and PSOE of "dragging" the State into a "trade war" with the United States. "The economy competes under unequal conditions due to the bureaucracy of the two-party system," Abascal said through the social network X. Feijóo has assured that "no patriot can defend someone who harms the interests of citizens" and has denounced the "conniving silence of Vox."

In Catalonia, President Salvador Illa has announced that he will summon social and economic stakeholders to the Generalitat (Catalan government) this Monday morning to "articulate a response" to the US tariffs.