Impact of Tariffs on Spain: Wineries Anticipate Losses of EUR400 Million as Industry Calls for Strong Response
The recent announcement of a 20% tariff on goods imported from the European Union, made by the U.S. administration, poses significant challenges for the agri-food sector in Spain. The country is a major exporter to the United States, particularly of olive oil, wine, and legumes, and industry stakeholders are beginning to quantify the financial repercussions of this trade conflict.
According to the Spanish Wine Federation, the U.S. market is crucial for Spanish wineries, marking it as their second-largest export destination overall and the primary market for sparkling wines. In 2024 alone, Spain exported 97 million liters of wine to the United States, valued at approximately EUR390 million, which accounts for 13% of its total export sales.
Industry experts argue that the tariffs targeting wine are unjustified, particularly given the minimal difference in tariff rates between the EU and the U.S. The General Director of the Spanish Wine Federation expressed concerns that these tariffs would adversely affect Spanish and European wineries as well as American consumers who rely on imported wines to meet their demand. The imposition of tariffs is expected to create economic uncertainty and drive up prices on both sides of the Atlantic.
In response to the tariffs, the Spanish agri-food industry is urging swift and decisive action from both the Spanish government and the European Commission. The Director General of the Spanish Federation of Food and Beverage Industries emphasized that these tariffs are a misstep and called for a reciprocal response to mitigate the negative impact on Spanish, European, and American interests alike.
Concerns also extend to the olive oil sector, with major Spanish groups like Dcoop voicing apprehensions over the potential price increases resulting from the tariffs. The U.S. is a significant market for olive oil, consuming around 400,000 tons while producing only 10,000 tons domestically. Stakeholders are hoping that the anticipated price hike will not lead to a substantial drop in U.S. consumption.
The Spanish Association of Olive Oil Industry and Export Trade lamented the disproportionate impact of the tariffs on Spanish olive oil producers compared to those from non-EU countries, which face lower tariff rates. This discrepancy threatens the competitiveness of Spanish olive oil in the global market.
Agricultural organizations have also voiced their opposition, with the General Secretary of the Coordinating Committee of Agricultural Organizations and Livestock Farmers criticizing the tariffs as nonsensical and counterproductive. They are calling on the EU and the Spanish government to leverage all available diplomatic tools to restore normal trade relations with the U.S.
In 2024, Spain exported products worth EUR3.609 billion to the United States while importing goods valued at EUR2.051 billion. Olive oil represents a significant portion of these exports, exceeding EUR1 billion, followed by wine and must, which accounted for over EUR300 million, and legumes and vegetables, nearing EUR250 million. In contrast, imports from the U.S. include soybeans, valued at approximately EUR650 million, as well as nuts and corn.
Overall, the toll on Spanish exports could reach EUR4.3 billion, according to the Exporters Club, which represents companies engaged in international trade. They predict a potential reduction of Spanish exports to the U.S. by up to 25%, translating into significant economic losses.
The Spanish Chamber of Commerce has indicated that the 20% tariffs could lead to an average decline of 14.3% in exports to the U.S. A detailed analysis by the Chamber suggests that the actual impact may range from a 10.1% to an 18.4% reduction in exports. Although the U.S. is Spain's leading non-EU market, the overall effect on Spain's total exports is expected to be modest, constituting less than 5% of total sales and resulting in a minimal dip in GDP.
Some sectors, such as construction and automotive manufacturing, appear to be insulated from immediate impacts due to the global nature of their markets. However, there are concerns regarding the textile industry, where major Spanish brands like Inditex and Mango could be affected by higher tariffs, particularly on products sourced from regions like Southeast Asia.
In conclusion, while the full extent of the impact remains to be seen, the recent tariff announcement has raised significant concerns across multiple sectors of the Spanish economy, prompting calls for urgent action to mitigate potential losses.
