Catalonia announces €1.5bn plan to combat Trump's tariffs 

Catalonia will launch a €1.5 billion plan to combat the effects of tariffs imposed by US president Donald Trump, according to Catalunya Ràdio and confirmed by a government source to the Catalan News Agency (ACN).

President Salvador Illa met with trade unions and employer associations on Monday to "coordinate a response" to the tariffs.

The plan includes €300 million to activate aid programs from the government's regular budgets, €900 million in loans and credit facilitated by the ICF (Catalan Finance Institute), €150 million for investment funds, €130 million for internationalization consulting, and €200 million to promote Catalan products in strategic markets.

Economy minister Alícia Romero and business minister Miquel Sàmper were also at the meetings, along with representatives from business associations Foment del Treball and Pimec, and the CCOO and UGT unions.

Trump's decision has been the "worst protectionism event" in decades, and an "unfair and unilateral decision, based on falsehoods," Illa said during a statement from the Catalan government headquarters at midday.

The Catalan president said that his cabinet is well aware of the "diagnosis" required in this event, "an extraordinary financial aid," he told journalists after the meetings.

His main goal is to "protect and strengthen Catalonia's businesses," as "to protect our business prosperity is protecting our welfare state, which, therefore, also protects our workers and families," he told reporters.

Illa also said that "all that we do not anticipate today, we will end up paying the consequences in the future."

Details of the proposal

The mobilization of €1.5 billion aims to "protect the resilience of Catalonia's business and agricultural sectors and the employment they generate," as well as help Catalan companies internationalize and enter global markets in response to the situation.

The €300 million of aid includes non-repayable grants, especially for the agri-food sector, funding for international promotion, and support for expanding the presence of Catalan companies abroad, encouraging multilocalization.

The €900 million in loans and credits will be allocated by the Catalan Finance Institute (ICF) to provide financial instruments for affected companies. This will include guarantees, working capital loans, investment loans, and interest rate subsidies of up to 1.5%.

In addition, €150 million will be allocated to investment funds and capitalisation, which will be managed by the ICF along with Avançsa, a public entity responsible for promoting Catalan businesses through public-private collaboration.

The government will allocate €130 million for consulting and support to promote the internationalization and market diversification of Catalan companies.

This includes designing tailored plans to adapt to the new US trade environment and reorienting the Catalonia Trade & Investment (ACCIÓ) network to overcome trade barriers.

Lastly, €200 million will be allocated to communication and promotional campaigns aimed at boosting Catalan products in strategic markets.

Meetings to address tariffs

Illa and the ministers also met with the General Council of the Official Chambers of Commerce, Industry, and Navigation of Catalonia.

Romero, Sàmper and presidency minister Albert Dalmau will meet with representatives from the various parliamentary parties to inform them of the government's measures.

On Wednesday, Trump announced a minimum 10% tariff on virtually all US imports, with tariffs for the European Union set to rise to 20%.

Since the US president's announcement, markets have experienced days of significant declines due to fears of a trade war.

Spain's €14.1bn response

Spain's Prime Minister Pedro Sánchez outlined last week the details of a €14.1 billion "trade response and relaunch" plan that his government will implement "immediately" to support sectors affected by the tariffs announced by the US.

In a speech in Madrid on Thursday attended by representatives of Spanish businesses, Sánchez explained that €7.4 billion of the funding will come from new resources and €6.7 billion from existing measures. 

According to the Spanish president, the goal is to "create a shield to protect our economy" so that "if the storm occurs, Spain will have a double umbrella" from both Spain and Europe.

A return to protectionism is not an "intelligent" approach to addressing the challenges of the 21st century, he said, while rejecting Trump's claims that the European Union imposes tariffs of 39% on the US. The true figure is around 3%, according to Sánchez.