Spain's exports to the United States have decreased by 5.9% between January and July compared to the same period last year, a decline in sales to the North American country that occurred after the implementation of the tariffs approved by Donald Trump, despite many exporting companies currently absorbing the cost of the 'tariffs' instead of passing them on to prices.
According to the Foreign Trade Report published this Tuesday by the Ministry of Economy, sales of goods to the US, which had increased by 2.6% year-on-year until March, began to gradually decline in April after the so-called 'Liberation Day,' when Trump declared a trade war on half the world. Thus, that month they decreased by 1.8% compared to the same month of the previous year; in May, by 4.8%; in June, by 6.4%, and in July, they plummeted by 10.4%.
The products that have been most affected by the decrease in sales to the US are ships, consumer manufactures, and some chemical products, but the overall impact on the Spanish trade balance and the economy as a whole is limited, as sales to that country only represent 1% of the GDP.
Customs data shows that total Spanish exports have grown by 1.4% in the first seven months of the year, although the indirect effects of the imposition of tariffs are already noticeable, for example, in the automotive sector.
Given that vehicles purchased by the US from other countries contain, in some cases, Spanish components, the sales of these components abroad have fallen by 9.4% in the first seven months of the year. In addition, the weakness of our European trading partners has also reduced their demand for automobiles, causing our car sales to also drop by 7.3%. This decline is particularly felt in manufacturing provinces like Palencia (where Renault operates), whose exports have fallen by 40.8% in the period, or Zaragoza (home to the Stellantis plant), which has sold 17% less this year.
Consequently, the trade balance is beginning to suffer from the increase in tariffs - the effective general tariff applied by the US stood at 19.5% at the end of August, the highest since 1933 - and trade restrictions, even though US importing companies are currently absorbing their cost instead of passing it on to final prices, which helps maintain consumption levels.
This has been confirmed by the OECD, which warns in its latest economic forecasts, published yesterday, that "the full effects of tariff increases have not yet been felt - many changes are being introduced gradually and companies are initially absorbing some tariff increases through margins - but they are increasingly visible in spending decisions, labor markets, and consumer prices."
Specifically, companies are using their inventories to avoid applying tariffs, as they can continue selling products purchased before they came into effect. In cases where they have had to stock up after the tariffs were implemented, they are using their "wide profit margins" to absorb the initial impact of the tariff increase, meaning they deduct the tariff cost from the profit for each sale instead of raising the product price. This behavior does not affect US public revenue but prevents a decline in the purchase of imported products and improves the trade deficit, Donald Trump's number one goal.
In addition to this behavior by importing companies, there is a gap between the announcement and the imposition of new tariffs and the exemption of higher tariffs for products already in transit.
In some cases, however, companies have indeed passed on the cost to consumer prices, especially in durable goods with a high import content, such as vehicles, which is why certain imports are already being affected.