For months it has been insisted on and the latest calculations confirm it: the immediate blow to Spain from the tariff war unleashed by Donald Trump will be ‘moderate’. At least in the exports of goods to that country, and always if compared with other members of the EU.
Because the impact will be a maximum of six tenths of GDP between 2025 and 2026. This is pointed out by the Institute of Economic Studies, which explains that this live damage is due to the fact that Spanish sales to the US They represent only 1.2% of GDPin front of the 3.7% that they represent, for example, for Germany or the Netherlands.
The big blow, therefore, is not for Spain in tariffs, which does not mean that there is a hidden blow: it is in the foreign direct investment (FDI) that we receive from Trump’s country, the key to the total of these flows that Spain obtains and that only in the first half of this year It has plummeted 53%.
The relevance of this phenomenon is seen both in relative and absolute terms. Because if exports to the US represent only 1.2% of Spanish GDP, the investment that came from Washington represented in that first half 17% of total FDI. It is, in fact, the main international investor in our country.
In absolute terms the account is also relevant. If six tenths of GDP due to tariffs translate into about 6,300 million euros in two years, the gross foreign direct investment that arrived last year from the US alone amounted to 6,405 million, according to data from the Ministry of Economy, Commerce and Business.
This is how we arrive at the paradox, which the IEE points out. Concerned about the static – or short-term – effects of tariffs, almost in the background the another more relevant fightbecause it has to do with dynamic – or longer-term – effects: what happens to the investment that Spain receives.
A ‘disturbing’ fall
Taking into account that this is a long-term effect, it will be more decisive to see what happens with foreign direct investment than with tariffs. Although some effects are already being felt.
This is shown by the Commerce data: in general, Spain saw the flow of investment coming from other countries reduced by 60.4% in the first half, especially due to the American collapse – from almost 3,100 million invested in Spain in the first half of 2024, it went to 1,442 million in the same period of this year – and the British, which plummeted by 86%.
It is an effect that generates some concern in the case of the US; There are no coincidences and the fall is directly related to the current commercial context.
We will have to wait for the annual comparison to see if this unrest dissipates or is confirmed, the IEE points out, but in any case the issue already appears in the report, full of warnings given the US leadership in this section.
In fact, the text indicates, the investment collapse “demonstrates Spain’s clear exposure to changes in the protectionist trade policies of the United States.”
“More specifically, such changes can produce variations and diversifications in international investment flows; ultimately, Spain may see the investment coming from that country modified,” highlights the IEE. An investment that traditionally focuses on real estate activities, wholesale trade and electrical energy supplies.
Why such a drop? What is seen in foreign direct investment is understood as a “indirect effect of tariffs”in a context of uncertainty and contraction of trade flows and also due to the appreciation of the euro over the dollar.
The diagnosis is that the increase in risk aversion, “evidenced by the fall in stock markets”, has restricted access to external financing for many companies. Everyone stay still, in short, until we see how Trump’s particular tariff crusade evolves.
Also until we know if “the Trump Administration ends up applying tax cuts and encouraging the repatriation of profits”, another aspect that could disrupt the landscape.
Thus, the document points out that in this new global economic context, “Spain must carefully evaluate both the risks and opportunities that arise for its role as an investment destination.” It is, they conclude, the last “added problem” within the commercial maelstrom arising from the White House.