The Government of Spain activates the Trade Response and Relaunch Plan in response to the US tariff hike

Moncloa Palace, Madrid

Pool Moncloa /Borja Puig de la Bellacasa

The Council of Ministers has approved a Royal Decree-Law on urgent measures in response to the threat of tariffs and to relaunch trade which aims to establish a safety net for companies and workers affected by the increase in tariffs being imposed by the United States.

The Minister for Economy, Trade and Business, Carlos Cuerpo, explained that the regulation gives concrete expression to the announcement by the President of the Government of Spain, Pedro Sánchez, to mobilise 14.1 billion euros in a Trade Response and Relaunch plan to improve the productive capacity of companies, boost their international presence and seek new markets, thus mitigating the negative impacts of tariffs on the Spanish economy.

During his appearance at the press conference following the meeting of the Executive, Carlos Cuerpo launched a message of confidence and unity to address this situation. The government will monitor the impact of the tariffs on Spanish products and industries and on prices, and has launched "an initial immediate plan to reinforce the safety net for the worst affected sectors, companies and workers". This safety net, the minister added, is complementary to and consistent with the efforts being made by the European Union to respond in a unified manner.

Cuerpo explained that the Trade Response and Relaunch Plan provides a short-term protection network to respond to short-term liquidity problems or a slump in orders, as well as the restructuring and internationalisation of our companies in the medium term so "they can increase their resistance to this tariff shock and to a closure of the North American markets".

Main measures included in the Response and Relaunch Plan

Pool Moncloa /Borja Puig de la Bellacasa

The Minister for Economy summarised, among the measures included in the plan, those being activated today through the Royal Decree-Law. The plan includes a new line of guarantees worth 5 billion euros through the Official Credit Institute to guarantee the financing of both exporter and importer companies affected by the change in US tariff policy and to support possible industrial restructuring processes. It also reinforces the Corporate Internationalization Fund (FIEM), increasing its budget to 700 million euros to enable companies to boost their international presence and diversify their exports to reduce risk.

Carlos Cuerpo also stressed that the coverage offered by the Compañía Española de Seguros de Crédito a la Exportación (CESCE), the Spanish export credit agency, to companies has been extended, with an increase in the maximum coverage limit from 9 to 15 billion euros, which will allow for the immediate mobilisation of 2 billion in coverage for international projects affected by the new tariffs.

Dialogue and negotiation of the plan

The minister highlighted the open dialogue in drawing up the plan and called on social partners, all the sectors affected, the parliamentary groups and the autonomous communities to maintain this dialogue to ensure that the response keeps pace with developments. "The idea is to have a real national plan made by all of us, a nationwide plan that allows us to adapt our response to the evolution of what is a very uncertain and dynamic situation", he remarked.

European response

Carlos Cuerpo stressed that Spain's relationship with the United States is a strategic one that must be protected and improved, and the government is therefore "reaching out to the American authorities to reach an agreed solution, and supports the European Commission in this task".

In this context, the minister referred to the meeting of the Foreign Affairs and Trade Council, held yesterday in Luxembourg, which addressed the need to expand the network of strategic trade partners and to ratify the agreement with Mercosur in order to lessen the impact of the closure of the North American market by diversifying exports.

Furthermore, in this forum, according to the minister, Spain proposed that the potential revenue raised by the taxes that would be imposed on American products, as a countermeasure to those imposed by the US administration, should be used to support potentially affected sectors, companies and workers.

Investments in research and innovation

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The Council of Ministers has approved two research calls that the Minister for Science, Innovation and Universities, Diana Morant, has described as "very strategic". The aim is, respectively, to attract international leaders in research and to boost artificial intelligence.

The minister framed these initiatives in the context of the government's "unprecedented" commitment to research and innovation, through universities and public bodies and collaboration with the private sector. A priority that, according to Diana Morant, has led to economic growth, improved productivity and the creation of quality employment. "There are two opposing paths in the world today: either denialism of science and of prosperity itself, or democracy based on scientific evidence," she said.

More resources to attract research leaders to Spain

On the one hand, the Government has approved the third call of the ATRAE Programme, which began in 2023 with the aim of attracting scientists from other countries and facilitating the return of Spanish scientists. Those selected must be leaders of research groups with high impact discoveries in their respective areas who have been undertaking their post-doctoral activity abroad for at least 5 of the last 6 years.

Morant highlighted the ambition of this edition: while the first edition had a budget of 25 million euros and the second 30 million, this time the programme has a budget of 45 million. The commitment of the call is for three years, which means the government will invest at least 135 million during this and the next two years. Together with the funds from previous calls, the investment will be close to 200 million over 5 years.

This funding will help to attract to Spain some 200 leading scientists in a number of strategic areas, such as climate change, artificial intelligence, space technologies, water resource management, physics and mathematics. In the previous two editions, the Ministry received 420 applications, from which 58 researchers were selected.

According to the Minister for Science, Innovation and Universities, this is a very competitive programme, as each researcher receives an endowment of one million euros for their project, with they can use to establish themselves and set up a research group in Spain. In addition, there is a commitment to offer long-term contracts to the researcher and his or her team by the centres and universities that host them.

In the past, 41% of those selected were foreign nationals; of these, half were from or citizens of the United Kingdom or the United States. Diana Morant pointed out that, given the attitude of the US administration towards science, the new call for proposals includes additional funding of 200,000 euros for researchers joining from the United States.

Boosting artificial intelligence

The Council of Ministers has also earmarked up to 36 million euros in grants for research projects in the field of artificial intelligence.. The duration of projects under this call, which is aimed at all universities and research centres and organisations, is 3 to 4 years. Each project will receive a maximum of 2 million euros, and the total budget is 36 million euros.

These grants, according to Diana Morant, will make a significant contribution to the training of new research talent which is highly specialised in artificial intelligence, thereby "generating a sufficient and indispensable critical mass to ensure that Spain not only participates in, but also leads, together with Europe, global development" in this field.

The minister pointed out that this call for applications comes in addition to other government initiatives, including the Generation D programme, which has a budget of 120 million euros to train and recruit 374 young AI researchers in Spain's main research centres.

Adapting the pharmaceutical system to the 21st century

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The Government of Spain has pushed for change in pharmaceutical legislation by giving the go-ahead to the Draft Bill on Medicines and Healthcare Products.. The Minister for Health, Mónica García, stressed that this is the first comprehensive and structural reform of this regulation since the 1990s and thanked the "fluid dialogue" with the pharmaceutical industry and all the ministries and agents who have contributed to the drafting of the bill.

The three key objectives of the reform are to modernise the medicines ecosystem, incorporate the lessons of the pandemic with regard to autonomy and strategic stockpiles, and ensure the sustainability of the system. Public bodies - García added - will be involved in all the medical research, development and marketing processes.

With regard to research, the draft bill regulates clinical trials by adapting European regulations. The deadline for deciding whether a new drug will be financed by the National Health System or how much it will cost has been cut to a maximum of 180 days. In addition, some medicines may enter the system before the decision on funding has been taken.

Moreover, the draft bill creates a reference price system to ensure real competition between different innovative, generic and biosimilar medicines. To this end, homogeneous groups of medicines will be established which patients will be able to choose from at the pharmacy, "and anything that falls outside this price reference framework can be paid for by the patient", as the Minister for Health explained.

The draft bill empowers more professionals to prescribe medication, such as nurses and physiotherapists, within their area of competence. It also empowers the pharmacist to dispense an alternative medicine if the prescribed medication is not available when the patient comes to the pharmacy, thus avoiding the need for the patient to return to the health centre.

To ensure strategic autonomy, the regulation reinforces dialogue between laboratories and the Spanish Agency for Medicines and Health Products (AEMPS) to detect the risk of possible supply shortages. It also reinforces communication channels in the event of a public health emergency. In the event of an alert affecting the availability of a medicine, the response will be expedited to ensure access.

Establishment of the State Public Health Agency

Also in the field of health, the Council of Ministers has approved the bill for the creation of the State Public Health Agency.

The Minister for Health recalled that, despite the "overwhelming consensus among parliamentary parties" for the establishment of the agency, in the end it did not receive sufficient support in the Lower House of Parliament. "We said at the time that public health is not to be trifled with and that one of the lessons of the pandemic is that health has to be separate from partisan interests," said Mónica García.

The government's intention is to shorten the deadlines for the bill to return to the Lower House of Parliament as much as possible. "We hope that in this case those who voted against will come to their senses, come to their senses and put the interests and health of citizens before their own interests," she said.

Regulation of the Democratic Memory Council

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The Minister for Education, Vocational Training and Sports and Government Spokesperson, Pilar Alegría, has reported on the approval by the Council of Ministers of the royal decree regulating the composition and functioning of the Democratic Memory Council.. This regulation also determines the organisation and functioning of the State Register of Democratic Memory Entities.

Alegría explained that the Democratic Memory Council, which will be chaired by the Minister for Territorial Policy and Democratic Memory, Ángel Víctor Torres, will include representatives from different ministries, professionals of recognised prestige, representatives of memorial organisations, trade unions and business associations. On the other hand, the Royal Decree specifies which memorial organisations may apply for registration in the State Register and establishes that those linked to exile and resistance outside Spain that carry out their activity in other countries may also be registered.

The approved text also establishes the creation of the Truth Commission, aimed at shedding light on human rights violations during the war and Franco's dictatorship. The commission shall be composed of a maximum of ten independent persons of recognised prestige in the academic or professional sphere and in the field of human rights, and shall complete its work within 18 months of its establishment with the delivery of its conclusions and recommendations.

Current affairs: President's trip to Vietnam and China

The Government Spokesperson then gave way to minister Carlos Cuerpo, recalling the official trip being undertaken by the President of the Government of Spain this week to Vietnam and China. Alegría explained that Pedro Sánchez will be accompanied by the Minister for Foreign Affairs, European Union and Cooperation, José Manuel Albares, and the Minister for Agriculture, Fisheries and Food, Luis Planas.

According to the spokesperson, this is a trip of "special significance" with the fundamental objective of "forging ahead with the commercial relaunch of our products, diversifying markets and strengthening economic, political and cultural relations with these two countries". The President of the Government of Spain himself, Alegría pointed out, has stressed in recent days the need to strengthen Spain's strategic autonomy, "which involves diversifying our relations".

Non official translation