PexelsMalta has responded cautiously to the recent US tariffs, opting to allow the European Union to take charge, despite the potential impact on certain areas of the local economy.
At the beginning of this year, the United States declared a 20% customs duty on products imported from the EU. Although numerous EU leaders expressed their disapproval, Malta opted for a more measured stance.
The government indicated that the responsibility for trade discussions lies with the EU, citing a statement made by European Council President António Costa. Ministers received instructions to refrain from public comments and to direct all enquiries to the Prime Minister’s office.
Malta’s subdued reaction could be attributed to its comparatively modest trade ties with the US.
Last year, Malta’s exports to the US reached €272.5 million, accounting for just over 5% of the country’s total exports, as reported by the National Statistics Office.
In contrast, it brought in €342.2 million from the US, accounting for under 4% of overall imports. As a result, Malta found itself facing a trade deficit of €70 million with the United States.
Even with the overall figures being low, the effect on specific sectors could remain considerable. Last year, exports to the US experienced the largest growth compared to any other country, increasing by €146 million. Notable exports comprised electronic components and aircraft, including helicopters and planes. Malta imported petroleum gas, aircraft components and various electronics from the US.
The recent tariffs may lead to an increase in the prices of Maltese products in the U.S. market, posing challenges for local businesses striving to remain competitive. Simultaneously, the cost of US imports may rise for consumers and businesses in Malta, contingent on the EU’s reaction.
Opposition leader Bernard Grech criticised the government’s strategy. He described the US tariffs as “a step back for everyone” and expressed that the government ought to have been more prepared.
Grech expressed discontent with Prime Minister Robert Abela for regarding the issue as merely a concern for Brussels, indicating a lack of sufficient action to safeguard Maltese businesses and employment. Grech stated that the government ought to have prepared contingency plans, conducted trade evaluations, and established new partnerships in advance.
As Malta seeks guidance from the EU, the European Commission is formulating its own approach. Maros Sefcovic, the EU Trade Commissioner, reported having an extensive conversation with senior US officials, during which he characterised the tariffs as “damaging and unjustified”. French President Emmanuel Macron has even called on French companies to delay any new investments in the US.
At the same time, international tensions are escalating. In reaction to the tariffs imposed by the US, China revealed a 34% tax on imports from America, leading to a decline in European stock markets.
