Impact of the US-EU agreement on the Portuguese economy explored
Portugal's economy could face a significant impact due to the recently implemented U.S.-EU trade agreement, according to an analysis by Tomás Delfim, a journalist in the Economy section of Expresso.
In a podcast episode hosted by Juliana Simões, part of the daily series Economia dia a dia on Expresso, Delfim delves into the expected effects on Portugal's growth. The deal, which sets a baseline 15% tariff on most EU exports to the U.S., could introduce higher costs for Portuguese exporters, potentially restraining growth by reducing competitiveness in key export sectors.
Delfim's analysis is based on data and economic research, taking into account the sectors most affected by the tariff, such as machinery, textiles, and cork-based products. These goods now face higher U.S. import tariffs, which may reduce volume or margins unless they can absorb or pass on the cost.
While the deal stabilizes tariff levels, replacing the threat of a 30% tariff with a 15% tariff, the increased tariff from previous zero or lower rates represents a trade cost increase that may weigh on Portugal’s export-driven growth.
However, the deal also ties in EU commitments to sizeable investments in the U.S. economy and increased purchases of American energy and defense goods, which could have indirect growth effects by improving transatlantic economic stability.
The EU Commission sees the deal as providing predictability for businesses, but the cost increase with a 15% tariff could dampen Portuguese export growth, especially for small and medium enterprises sensitive to cost rises.
Tomás Delfim's expertise in economics, combined with his role as host and sound designer of the podcast episode, contributes to a comprehensive and engaging discussion on the potential impact of the U.S.-EU trade agreement on Portugal's economy. The podcast episode is a valuable resource for those seeking to understand the implications of this deal for Portugal's economic landscape.
The recently implemented U.S.-EU trade agreement, with its baseline 15% tariff on most EU exports to the U.S., could potentially increase costs for Portuguese exporters in sectors like machinery, textiles, and cork-based products, as per Tomás Delfim's analysis. This trade cost increase might negatively impact the growth of small and medium enterprises in Portugal, subsequently affecting its business sector, thus dubbed as 'Blitz' by some economists.
Despite the EU Commission's claim that the deal provides predictability for businesses, the 15% tariff could potentially hamper the growth of Portugal's finance sector, as it might act as a deterrent for Portuguese exporters in key export sectors, thereby decreasing the competitiveness of Portugal's economy in the global market.
