Murcia businesses gear up for tough times as Trump's tariffs hit exports to the US

Regional food and drink sectors face losses due to new 20% tariffs on EU products

Murcia’s businesses are preparing themselves for some significant losses following the announcement of new tariffs by US President Donald Trump. Starting from April 5, a blanket 10% tariff will be imposed on all imports to the United States and on top of that, Spain and other EU countries are facing an additional 20% tariff.

This new measure is part of a broader strategy by the US to tackle what they see as unfair trade practices. Financial markets have reacted sharply, with European, and particularly Spanish, stocks taking a noticeable dive after the news broke.

The announcement has left regional businesses deeply concerned, especially in the food sector, as nearly €621 million worth of exports to the US were recorded last year. The tariffs are set to hit Murcia’s key industries hard, with food and drink at the forefront.

Key export products hit hard

José García Gómez, President of the Murcia Region Food Business Association (Agrupal), has raised concerns about how these tariffs will impact high-export products like food ingredients and additives (€125.59 million), sugar and confectionery (€78.27 million), preserved fruits and vegetables (€44.34 million), juices (€27 million) and wines (€17.97 million from DO and €6.64 million from other wines). Other affected sectors include containers and packaging (€46.94 million), fish and seafood (€43.24 million) and chemical products (€40.30 million). Losing access to the US market for these products could have significant ripple effects.

Uncertainty over future trade relations

The uncertainty surrounding the future of trade relations between the EU and the US has created widespread anxiety across various sectors in Murcia. Joaquín Hernández, President of the Regional Economic Circle and a prominent figure in the wine industry, shared his concern about the unpredictable nature of the tariffs.

“What’s happening right now isn’t good. There’s tremendous uncertainty about what trade relations will be like now and in the future,” he said.

“What worries us most is not knowing what’s going to happen, and therefore, we view everything with trepidation, since everyone is talking about a trade war, and that word worries me.”

García Gómez also expressed his alarm, comparing the tariffs to “a torpedo to the waterline.”

He added, “We’re entering uncharted territory, having no history of a challenge of this magnitude.”

Alfonso Hernández, President of the Metals Federation, reflected these sentiments about the uncertainty surrounding the tariffs by commenting, “What we know for sure is that we’re entering uncharted territory, having no history of a challenge of this magnitude.”

He added that the potential for the tariffs to cause significant disruption to global trade could lead to “a negative impact on its own citizens,” especially if the US economy is severely affected.

Impact on global trade and the lemon sector

The tariffs are also expected to have wider consequences on global trade, especially in agriculture. The Murcia-based interprofessional association Ailimpo, an interprofessional association based in Murcia, has raised concerns that the 20% tariff will make it tough to export Verna lemons to the US. Even though the US market for this product is relatively small, other products like concentrated lemon juice and essential oils, which make up about 10% of exports, could face a much bigger impact.

José Antonio García, director of Ailimpo, said, “The tariffs will definitely disrupt our efforts to grow in the American market,” reflecting the challenges faced by other sectors that depend on US trade.

Increased competition and consumer impact

The Chamber of Commerce of Murcia has also expressed concerns that these tariffs could make regional businesses less competitive. For products like canned goods, juices, and sweets - where prices can change quickly - importers may start looking to competitors like Brazil or other South American countries. This shift could further weaken the competitive edge of businesses in the region.

Hernández pointed out that the new tariffs will have “a direct impact on the consumer.” As the cost of products from Murcia goes up due to the higher import prices, consumers are going to notice higher prices on items like wine and processed foods.

Ultimately, the tariffs are creating a sense of unease across Murcia’s businesses. With so many industries relying on exports to the US, the economic fallout could be immense. The uncertainty surrounding the future of US-EU trade relations remains the biggest concern for businesses in the region, with no clear solution on the horizon.

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