(Reuters) — The Spanish government will provide €14.1 billion ($15.66 billion) worth of measures to help its economy weather the impact of the new U.S. tariffs, Prime Minister Pedro Sanchez said Thursday.
The plan includes €2 billion worth of credit insurance and export risk coverage.
The new tariffs President Donald Trump announced Wednesday have rattled markets and drawn condemnation from world leaders facing an abrupt end of an era of trade liberalization that has shaped the global order for decades.
Spain, which like other European Union members was hit by U.S. tariffs imposed on imports from the bloc, is the world’s top exporter of olive oil and also sells important quantities of auto parts, steel and chemicals to the United States.
Mr. Sanchez described Trump’s actions as “terrible news for the world,” “unintelligent” and “a return to 19th-century protectionism.”
“This tariff attack by the U.S. administration makes no distinction between friends and enemies, it doesn’t discriminate based on ideology or trade balance; it’s against everyone and everything,” he said.
Mr. Sanchez also stressed Europe’s need to find new trading partners elsewhere.
Spain’s aid package — which still needs to be approved by a fragmented parliament — will include €7.4 billion in new financing, and the rest will come from existing instruments such as soft loans, Mr. Sanchez said.
He said €5 billion of EU recovery funds would be repurposed to help industries hurt by the tariff shock — such as auto suppliers — reorient their productive capabilities towards other high-demand sectors.
Mr. Sanchez urged the European Commission to set up a fund financed by revenue from tariffs on imports from the U.S. that are set to be hiked this month in response to Washington’s move that he said was unfriendly and unjustified.
Spain has sought EU authorization to allow more flexibility for large-scale domestic aid for the affected sectors.
Mr. Sanchez said he would use a labor law provision similar to a furlough scheme implemented during the COVID-19 pandemic to allow the hardest-hit companies to maintain their workforce until they recover.
“We’ll take advantage of this trade war to give our industry a new impulse for its modernization and internationalization,” he said.