The new tariffs imposed by the United States are once again putting international trade under pressure, after Donald Trump’s administration came forward with an executive order that establishes a global tax of 10% on imports, a measure that could particularly affect countries like Portugal.
The United States Supreme Court declared illegal the previous tariff regime imposed by Donald Trump under an emergency law. The judges understood that only Congress has the constitutional competence to authorize broad-based tariffs, since the North American Constitution gives the legislative power the prerogative to tax imports, according to the portal specialized mainly in Pplware technology.
Following this decision, on February 20 of this year, the Trump administration signed a new executive order that allows temporary additional tariffs to be imposed with the aim of responding to imbalances in the balance of payments. The measure came into force on Tuesday, setting a general tax of 10% on imports from countries without specific exemptions.
It is important to highlight that this new rate accumulates with other tariffs that already existed before Trump’s return to the White House, increasing the tax burden on several foreign products.
Tariffs do not affect everyone equally
According to experts from Global Trade Alert, an initiative by the St. Gallen Foundation for Prosperity through Trade that has been monitoring changes in global trade policies since 2009, Portugal could become the European Union (EU) country most affected by this change.
According to the newspaper Público, experts analyzed four different scenarios to compare the average tariffs applied by the US to each country. The first scenario corresponds to the period before the Supreme Court decision that considered a significant part of the tariffs imposed by Trump unconstitutional, including, in the European case, the fees and exemptions agreed in August between the US and the EU.
The following three scenarios analyze the moment immediately after the tariff lead, the application of the new general additional tariff of 10% and the eventual realization of Trump’s intention to raise this rate to 15%, according to the same source.
Different impacts between large economies
Contrary to what it might seem, the cancellation of part of the tariffs was not necessarily beneficial for everyone. For countries like China, Brazil or India, which faced tariffs above 20%, the new additional rate of 10% resulted in a lower average rate, standing at 10%, 15.65% and 8.45%, respectively.
In the case of the EU, however, the average rate remains close to the initial values. Before the court decision, it was 11.74%; with the new additional rate, it is 10.45%. The difference is reduced and may even become unfavorable if the rate is increased to 15%.
Portugal in a vulnerable position
Global Trade Alert accounts indicate that Portugal may be particularly affected within Europe. The average tariff applied by the USA to Portuguese products went from 9.49% before the Supreme Court’s decision to 9.76% with the new rate coming into force, according to the source cited above.
Portugal is, therefore, the only EU country where there is already an increase in the average tariff, a scenario that could worsen if the additional rate rises to 15%. The problem lies mainly in the loss of exemptions that benefited strategic sectors. Products such as cork and clothing, with a relevant weight in exports to the North American market, no longer benefit from special regimes.
According to Johannes Fritz, executive director of the St. Gallen Foundation, cited by Público, the legal rule previously used by the Trump administration allowed for specific exemptions to be established by country for certain products. The new legal basis does not contemplate this possibility.
Consequences for strategic sectors
With this change, exemptions previously agreed between the US and the EU, namely for cork, some types of clothing and diamonds, are no longer in force.
In the Portuguese case, the situation is particularly sensitive in the cork sector, where Portugal is the world leader in production and exports, especially wine corks. The United States is one of the main destination markets, playing a decisive role for the sector, according to .
Taking into account the growing importance of the North American market in Portuguese exports, especially in areas such as cork, the increase in tariffs represents a relevant threat to the competitiveness of national companies.
Also read:
