Pedro Sánchez announces the immediate deployment of a €14.1 billion Trade Response and Relaunch Plan to mitigate the impact of US tariffs

Moncloa Palace, Madrid

The President of the Government of Spain, Pedro Sánchez, during his appearance after the meeting with representatives of the Spanish productive fabric to discuss the response to the US tariff threat (Pool Moncloa / Jose Manuel Álvarez)

The President of the Government of Spain, Pedro Sánchez, has announced the immediate deployment of a Trade Response and Relaunch Plan endowed with €14.1 billion to "mitigate the negative impacts of the trade war initiated by the Trump administration and weave a shield to protect our economy". The plan will mobilise €7.4 billion of new funding and a further €6.7 billion from existing instruments. "The Government of Spain is not going to wait and see what happens in the next few days. We are going to respond now to be prepared, with the immediate deployment of the plan, "so that, if the storm eventually breaks, Spain will have a double umbrella: the European one and the Spanish one", he explained.

This was stated by the chief executive during his speech at the meeting he held with representatives of the Spanish productive fabric on the response to the tariff threat. The meeting was attended by the Second Vice-President and Minister for Work and Social Economy, Yolanda Díaz; the Third Vice-President and Minister for Ecological Transition and Demographic Challenge, Sara Aagesen; the Minister for Transport and Sustainable Mobility, Óscar Puente; the Minister for Industry and Tourism, Jordi Hereu; the Minister for Agriculture, Fisheries and Food, Luis Planas; the Minister for Economy, Trade and Business, Carlos Cuerpo; the Minister for Health, Mónica García, and the Minister for Digital Transformation and Public Function, Óscar López, as well as representatives of the most affected sectors (automotive, agri-food, light and heavy industry, pharmaceuticals, among others) and social agents.

The president denounced the announcement of tariffs by the US administration, which is "terrible news for Europe, for the world and for Spain", since "nobody, and neither Europe nor Spain, will be immune to these impacts", although "this does not mean that we are going to stop growing and advancing- far from it". He underlined that "we have to look long and hard, seeing opportunities where others only see obstacles". Furthermore, Pedro Sánchez denied that Europe applies tariffs of 39% to the US: "This is not true. In fact, the EU only applies tariffs of around 3%". He also argued that the announced tariffs are not reciprocal: "Their so-called reciprocity is simply an excuse to punish countries, apply sterile protectionism, and raise money to try to mitigate the deficit that is causing a questionable fiscal policy".

Having said that, he reiterated that Spain and Europe continue to hold out their hand and "will always do so" because "the American people are friends and allies, although that does not mean that we are going to stand idly by". He assured that "the EU will react with proportionality, unity and the strength that comes from being the largest trading bloc in the world".

Helping and protecting businesses

The President of the Government of Spain, Pedro Sánchez, during his appearance after the meeting with representatives of the Spanish productive fabric to discuss the response to the US tariff threat

The chief executive announced that the Trade Response and Relaunch Plan will be deployed today, the first pillar of which will focus on helping and protecting businesses and jobs that could be affected by the new US tariffs. "Our workers and our businesses are the engine of our prosperity, and that is why we are going to defend them," Pedro Sánchez emphasised. To this end, two lines of ICO guarantees and intermediated financing will be set up, endowed with €6 billion to facilitate access to financing and meet working capital needs. Furthermore, the Productive Industrial Investment Support Fund will be promoted, endowed with €200 million to provide loans and equity participation, aimed at modernising and installing new production plants. The new MOVES plan will also be implemented, with €400 million, which will stimulate the automotive sector.

Preserving jobs and reorienting activity

The Government set up the Social Dialogue Table with employers and trade unions after a first meeting yesterday to follow up and address the needs of the affected groups. It will also immediately convene the Sectoral Trade Conference, led by the Minister for Economy, Trade and Business, to work closely with its counterparts in the regional governments for the duration of the trade dispute. In addition, Minister Carlos Cuerpo will hold a round of consultations with parliamentary groups and will appear before the Lower House of Parliament to share information and report on the different measures being adopted. The Government will also activate the RED mechanism, which "will enable the workforce to be maintained and help employees of the companies hardest hit by the trade war until their activity recovers, as the ERTEs did during the pandemic". The president assured that "the Government is present. It takes responsibility and uses all the resources of the state to protect and help people. We did this during the pandemic, during the inflationary spiral and during the droughts, and we will do it again now".

According to Pedro Sánchez, the aim is not only to "overcome this blow and ensure that the unreasonable behaviour of some leaders is not ultimately paid for by the social majorities, but also to emerge stronger from it and take advantage of the trade war to give our productive fabric a new impetus for modernisation and internationalisation". The second pillar of the new plan will therefore consist of reorienting productive capacity and relaunching it in the new global context, under the prism of open strategic autonomy. A total of €5 billion will be channelled from the Recovery Plan so that the industries and companies threatened by the tariff shock can transform and reorient their productive capacities towards new sectors with high demand.

At the same time, the Government will help companies to find new markets and expand their exports, with €2 billion in credit insurance and export risk coverage, €500 million for the internationalisation of SMEs, and a specific ICEX plan that will help sectors affected by the new trade scenario to "consolidate their position in the US and access new markets", the president said. To articulate all these measures and ensure their proper implementation, an Inter-Ministerial Commission for Trade Response and Relaunch will be set up, chaired by Minister Carlos Cuerpo.

Request for emergency measures from the European Commission

The President of the Government of Spain, Pedro Sánchez, and the Third Vice-President and Minister for Ecological Transition and Demographic Challenge, Sara Aagesen, after the meeting | Pool Moncloa/Borja Puig de la Bellacasa

Within the framework of the plan deployed, and to maximise its results, the president advanced that Spain will ask the European Commission to adopt a series of emergency measures at EU level: the activation of a special framework for state aid, which will provide greater flexibility to national support measures; the creation of an Aid Fund for the affected sectors, financed with the collection of EU tariffs, and the revision of some EU regulations to support the most affected sectors. It will also call for work to be speeded up to achieve ratification of the agreement with Mercosur.

"The Government of Spain will mobilise some €7.4 billion in new financial and trade resources and leverage a further €6.7 billion from existing instruments. We will do it from today and in a preventive way to protect our companies and workers from the uncertainty and tariff impacts that already dominate the horizon, and also to take advantage of this commercial crisis to give the Spanish economy a new push towards modernising and opening-up", he added. Last, he stressed that Spain will continue to work for European integration, the defence of multilateralism and openness to the world, seeking new partners. In this vein, the Government today launched the campaign 'Buy yours, defend ours', because "our values are not for sale, but our products and services are".

Non official translation