UU. It is the main commercial partner of Portugal, with the weight of the goods to the US. To represent 2% of GDP in 2023. However, the orientation of the new US administration increases the barriers to the entry of national goods in the country, including the highest customs rights over the importation of goods.
In This Context, Banco de Portugal (BDP) Estimate the Degree of Exposure of the Economy and Portuguese Companies to The Us Market, Concluding that the National Sectors That Are More In Danger To The Customs of Donald Trump Administration Are The Manufacturing of Non-Metallic Mineral Products Glass, Ceramic Products and Cement), The Industries of Bevenge, Equipment, Equipment Computer, Communications, Electronics and Optics and Leather Industry.
In all these strongly exporters sectors, the percentage of companies with exposure relevant to the US market varies from 8% to 12%, details a study published in the new economic bulletin of the Central Bank governed by Mario Centeno.
The BDP explains that “about 70% of the value of the goods exported by Portugal to the US rates. UU. Between 0% and 2%”, however, “6% of the value of exports is affected by equivalent tariffs or greater than 10%.”
Therefore, “the impact on Portuguese exports of a possible aggravation of American tariffs will depend on factors such as the magnitude of increased customs rates of each type of good and their weight in Portuguese exports to the US market.”
In addition, “the reaction of exporting companies, in a dynamic context in which new markets are sought and where there are changes in consumer performance levels and relative prices of international transactional goods, will also determine the impact of new tariffs,” adds the Central Bank.
In practice, this means that with the imposition of tariffs, “the US consumer will observe an increase in the price of goods and, consequently, will reduce the requested amount.” According to the BDP, exporting companies may mitigate this effect by reducing their sales prices by compressing their profit margin or, in cases of multinational companies, another response strategy may be the creation of productive capacity in the United States.
However, despite the reduction of transport costs for the final consumer, “the displacement of production implies a change in the cost structure that may not be compatible with the use of comparative advantages, which makes this option unfeasible,” he warns.
Adding companies can also be affected by indirect, either due to changes in the prices practiced by its competitors in several markets or through changes in supply chains and production costs.
“The effects of tariff changes, which can be extended through retaliation measures, will be negative for exports and the aggregate welfare of economies” and “will require adaptation by companies and public policies,” the study warns.
In the advanced scenarios of the Central Bank, an increase of 25% in the rates imposed by the United States, in particular, in the imported European Union, accompanied by a retaliation of equal magnitude by the affected countries.
“This increase in rates could lead to a cumulative contraction of the GDP of the Euro area between 0.5% and 0.7% after three years, with a more significant impact on the first year.”
As for the effects on the Portuguese economy, BDP estimates a reduction in GDP close to 0.7% until the end of three years and more concentrated in the first year.
In addition to the direct effects of the imposition of tariffs, “the environment of greatest uncertainty, with negative repercussions on the confidence of economic agents, the result of future commercial policies, their scale and duration, the possibility of reprisal measures and the induced volatility in production costs and the prices of goods” can also result in a “reduction in investment and private consumption.”
In this context, “the global impact of shocks considered points to a cumulative reduction in GDP in around 1.1% during the end of three years, with effects concentrated in the first two years,” says the Central Bank ruled by Mario Centeno.
