Spanish PM promises €14.1bn to protect businesses and jobs from US tariffs

Spain's prime minister Pedro Sánchez has outlined 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 US President Donald Trump. 

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. 

"Unjust" trade war 

Sánchez addressed around 70 representatives from the business and economic world at the Spanish government's Moncloa headquarters, promising that they "will not stand idly by" in the face of the "unjust" trade war initiated by Trump. 

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 

Trump's supposed reciprocal measures are merely an excuse to "punish" countries and enforce "sterile protectionism," the Spanish PM said. 

Sánchez confirmed that the tariffs will be met with a proportional and united response from the European Commission, which will be complemented by Spain's plan. 

€14.1 billion 

The first key action of the €14.1 billion plan will be the creation of two lines of credit and financing amounting to €6 billion, which will be distributed via the ICO (Official Credit Institute). 

In addition, a €200 million Fund for Productive Industrial Investment will provide loans or equity stakes to modernize existing plants or set up new production facilities. 

Sánchez's plan also includes the renewal of the 'Moves Plan,' with an allocation of €400 million, designed to stimulate the automotive sector and promote the transition to a greener economy. 

Furthermore, the government will redirect €5 billion from its post-pandemic Recovery Plan to support affected businesses. According to Sánchez, the goal is to help businesses reorient their production toward sectors with high demand, such as defense.  

The Spanish PM also announced specific provisions to assist businesses in finding new markets and expanding their exports. 

The executive's response will involve constant dialogue with social and economic leaders, as well as the autonomous communities – including Catalonia – and parliamentary groups, Sánchez said. 

He also called on the European Commission to adopt emergency measures, activate a special framework for state aid that allows more flexibility, and create an aid fund for the affected sectors. 

World's largest trade relationship

Earlier on Thursday, the Spanish government released a statement saying that the tariffs will primarily affect "US citizens and businesses," but also "the global economy and financial markets, with consequences that are still difficult to estimate." 

The Spanish executive emphasized that Europe has always supported a negotiated solution and continues to do so: "We must protect the world's largest trade and economic relationship." 

"Every day, €4.4 billion in goods and services trade cross the Atlantic between the United States and the European Union, and foreign investment totals €100 billion in each direction." 

Catalan president calls meeting

The Catalan president Salvador Illa has called key social and economic figures to government headquarters in Barcelona on Monday morning to "formulate a response" to the tariffs announced by the United States.