Concerns over potential U.S. recession outweigh immediate impacts of Trump's tariffs on Spanish firms.
The IBEX 35 index experienced a significant decline, falling 5.1% on Monday, reflecting widespread losses across Asian and European markets amidst ongoing uncertainties surrounding U.S. trade policies under President
Donald Trump.
Among notable Spanish firms, there is a prevalent sentiment that fears of an impending economic recession pose a greater threat than the direct ramifications of Trump’s proposed tariffs.
Key companies within the IBEX 35, such as Santander, Inditex, and Iberdrola, which have substantial operations in the United States, express concern that a U.S. downturn could have severe repercussions on global investment and consumption.
A prominent executive in the Spanish infrastructure sector, speaking anonymously, emphasized the critical role of consumer spending in the U.S. economy, suggesting that discontent among voters could resurface quickly if their financial well-being is jeopardized.
The construction and infrastructure sector has already felt the effects of heightened political uncertainty, with significant drops in stock prices since the announcement of reciprocal tariffs on April 2. ACS has seen a 13.5% decline in its market value, while Ferrovial and Acciona reported losses of 12.1% and 12.2%, respectively.
Sacyr, which has around 10% of its business affiliated with the U.S. market, experienced a downturn of 12.5%.
Industry leaders warn that the combination of a potential recession, rising raw material costs, and workforce challenges—largely attributed to immigration pressures—could impact construction and infrastructure management in the short to medium term.
Executives acknowledge that discussions regarding Trump's policies have become central to strategic planning meetings.
Despite the panic affecting stock performance, many in the infrastructure sector maintain that their fundamental business models remain robust.
They express that if a recession does occur, infrastructure investment could serve as a crucial lever for economic recovery.
Spanish companies like ACS and Ferrovial have established a long-standing presence in the U.S. after acquiring American firms, enabling them to operate as local references in the market.
While some companies grapple with the realities of potential federal funding cuts for infrastructure projects, others see the U.S. as a promising market for long-term investments.
The infrastructure sector is currently in need of nearly half a million new workers annually, prompting calls for temporary work visa programs to support this demand.
In the financial sector, Banco Santander has actively expanded its operations in the U.S., launching its digital banking service Openbank in October, aimed at bolstering its retail banking business.
Ana Botín, the bank’s president, stressed that diversification serves as a stabilizing factor for the institution amid prevailing uncertainties.
The bank remains committed to meeting its 2025 objectives despite monitoring ongoing developments related to Trump’s policies.
BBVA, another major Spanish bank, is focused on its operations in Mexico after divesting its U.S. business in 2020. The institution remains cautious of a slowdown in the Mexican economy, which could adversely impact its balance sheet.
In the retail sector, Inditex’s CEO, Óscar García Maceiras, acknowledged the need for calm amid geopolitical turbulence but emphasized the company’s ability to adapt due to its diverse global manufacturing footprint.
The renewable energy sector similarly faces scrutiny regarding Trump's policies.
Following his election, immediate actions included a two-month suspension of land leases for wind projects and enhanced tariffs on key imports, provoking concern among Spanish energy firms like Iberdrola and Acciona.
Despite these challenges, both companies have bolstered their U.S. investments over recent years.
Iberdrola recently launched its largest solar project in Texas, while Acciona has prioritized solar investments in the U.S., seeing it as a vital market.
Repsol, however, grapples with revocations of permits to export Venezuelan crude, posing additional challenges to its operational strategy.
In the steel industry, firms like ArcelorMittal express heightened concern over potential downstream effects from the tariffs rather than direct imposition.
There is apprehension that U.S. tariff policies may lead to an influx of steel supplies from alternative markets, exacerbating an already saturated European market.
Industry leaders fear that Trump’s 'America First' policy may jeopardize the European steel industry and its associated economic sectors.
Concerns are mounting as the consequences of such protectionist measures may become more pronounced compared to the first Trump administration, as outlined by Eurofer's president, Henrik Adam.