Spanish Government Implements New Measures Against U.S. Tariffs
The government mobilizes €14.1 billion to support businesses affected by increased tariffs from the U.S.
The Spanish government has announced the mobilization of €14.1 billion to address the economic impact of tariffs imposed by former U.S. President Donald Trump.
This initiative aims to provide assistance to companies that have incurred losses during the pandemic, particularly those at risk of bankruptcy due to ongoing trade tensions.
The new legislation, approved by the Council of Ministers, includes provisions for an extended accounting moratorium until 2027 for businesses that reported losses in 2020 and 2021. The government believes that the overall economic impact of the U.S.-Spain trade relationship will be 'moderate,' given the limited relative weight of U.S. merchandise trade in Spain's GDP.
However, the decree highlights that some sectors may experience 'liquidity tensions' due to their significant exposure to U.S. trade.
In fact, the announced increase in tariffs could have substantial effects on commercial activity, production, and employment across various Spanish companies.
The 'Response Plan and Trade Relaunch' introduced by the Spanish government seeks to mitigate the adverse effects of these tariffs by focusing on three main areas: promoting productive investment, ensuring liquidity, and facilitating export activities for affected companies.
The plan comprises a total of €14.1 billion in funding, including €7.4 billion in new financing and €6.7 billion from existing financial instruments.
Specifically, the legislation outlines a provision for a state-backed guarantee line amounting to €5 billion to support financing for companies affected by changes in U.S. tariff policy.
This is particularly directed toward exporters and importers that are significantly exposed to the U.S. market, either directly or indirectly through their supply chains.
Additionally, the government plans to increase the budget for the Internationalization of Companies Fund (FIE) from €500 million to €700 million to support export projects and investments abroad.
The decree also aims to strengthen state coverage for internationalization risks, mobilizing an additional €2 billion and expanding the coverage limit by €6 billion to a total of €15 billion, thereby enhancing public support for export activities.
While the government characterizes the expected overall impact on the economy as 'moderate,' it acknowledges the potential for significant heterogeneity in effects across different sectors and regions, particularly for those companies closely engaged in trade with the United States.
This initiative aims to provide assistance to companies that have incurred losses during the pandemic, particularly those at risk of bankruptcy due to ongoing trade tensions.
The new legislation, approved by the Council of Ministers, includes provisions for an extended accounting moratorium until 2027 for businesses that reported losses in 2020 and 2021. The government believes that the overall economic impact of the U.S.-Spain trade relationship will be 'moderate,' given the limited relative weight of U.S. merchandise trade in Spain's GDP.
However, the decree highlights that some sectors may experience 'liquidity tensions' due to their significant exposure to U.S. trade.
In fact, the announced increase in tariffs could have substantial effects on commercial activity, production, and employment across various Spanish companies.
The 'Response Plan and Trade Relaunch' introduced by the Spanish government seeks to mitigate the adverse effects of these tariffs by focusing on three main areas: promoting productive investment, ensuring liquidity, and facilitating export activities for affected companies.
The plan comprises a total of €14.1 billion in funding, including €7.4 billion in new financing and €6.7 billion from existing financial instruments.
Specifically, the legislation outlines a provision for a state-backed guarantee line amounting to €5 billion to support financing for companies affected by changes in U.S. tariff policy.
This is particularly directed toward exporters and importers that are significantly exposed to the U.S. market, either directly or indirectly through their supply chains.
Additionally, the government plans to increase the budget for the Internationalization of Companies Fund (FIE) from €500 million to €700 million to support export projects and investments abroad.
The decree also aims to strengthen state coverage for internationalization risks, mobilizing an additional €2 billion and expanding the coverage limit by €6 billion to a total of €15 billion, thereby enhancing public support for export activities.
While the government characterizes the expected overall impact on the economy as 'moderate,' it acknowledges the potential for significant heterogeneity in effects across different sectors and regions, particularly for those companies closely engaged in trade with the United States.
Translation:
Translated by AI
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
