What impact will Trump’s new oil and car tariffs have on Spain?

This week US President Donald Trump confirmed what he had long been threatening and his government will from April impose 25 percent tariffs on car imports from around the world.

Some European countries, notably Germany, are particularly exposed to this, and the biggest blows to the sector have been suffered by manufacturers like BMW and Volkswagen owing to their exposure to the North American market.

In Spain, however, experts seem to think the impact won’t be as strong.

READ ALSO: Americans in Spain to hold anti-Trump protests in five cities

Despite the fact the Madrid Stock Exchange fell upon the news (as did most indexes around the world) Spanish car manufacturers seem less concerned about the consequences, mainly because Spanish production does not depend on the US market anywhere near as much as in other countries.

In fact, the Spanish Association of Automobile and Truck Manufacturers (ANFAC) claims it hasn’t exported a single car to the Americans in the last two years: “We do not export any vehicles. Zero,” the sector’s employers’ association told the Spanish press.

2023 was the last year in which Spain exported serious numbers of vehicles to the United States, a period in which four different models were sent stateside.

Since then, however, Ford’s factory in the Valencia region has stopped manufacturing the Tourneo and Transit Connect vans, while the Mercedes plant in Vitoria-Gasteiz did not approve its Vitto and Classic V models for use as chauffeur-driven vehicles in the US.

According to data from the US Department of Commerce collected by Spanish daily El País, Spain overall only exported 8,316 ‘light vehicles’ with a total value of $178.5 million dollars last year. This pales in comparison with the more than $8 billion that Spain exports in cars to France or Germany, the main markets for Spanish industry.

However, though the Spanish car sector seems less exposed than many countries, particularly Mexico, Canada, Germany and Japan, reciprocal tariffs implemented by the EU could be felt by Spanish consumers.

Advertisement

While in the United States around half of cars bought are manufactured outside the country, barely 12 percent of the cars that are imported into Europe come from the United States, according to ACEA.

If Europe decides to respond by raising trade barriers on American cars, the main victims will be the Tesla Model S and, above all, American sports car models such as the Ford Mustang or the Chevrolet Corvette. 

Therefore, if the European Union does decide to respond, an increase in the prices of American cars and related products is expected in Spain. For example, imposing tariffs on Harley-Davidson motorbikes has already been considered as an option.

Spain could be hit harder by Trump tariffs in other sectors, however.

The US President has also recently announced 25 percent secondary tariffs on countries that buy oil from Venezuela. As one of the main buyers of Venezuelan oil, Spain is among the countries affected, along with China and India, among others.

However, experts say despite being one of the world’s largest importers of Venezuelan oil, the quantity is still not sufficient enough to make a huge difference in Spain.

Advertisement

Professor Miguel Sebastián explained on Spanish TV programme Al Rojo Vivo that “the impact for Spain is marginal because we import little from Venezuela.”

Spain has in the past acquired around 4 percent of Venezuelan oil, a similar number to Cuba, and tariffs could generate an increase in commercial costs for Spanish companies if they decide to continue importing, but experts don’t seem to think that consumers will feel any kind of repercussions as a result.

READ ALSO: Higher costs, less supply: Spain faces same ‘egg-onomic’ crisis as US