CIUDAD REAL Nov. 8 (EUROPA PRESS) – The Ciudad Real Chamber of Commerce has published a detailed report on the recent presidential and legislative elections in the United States, pointing out that an increase in trade barriers and the fragmentation of the global economy could affect to key sectors for exports from Castilla-La Mancha and Ciudad Real, especially the cheese sector due to its greater dependence on the US market. Among the main products exported to the United States from Castilla-La Mancha, cheese stands out as the most vulnerable product to an increase in tariffs or other protectionist barriers. The United States is the main destination for cheese exports from Castilla-La Mancha, and in 2023 57.5 million euros in cheese were exported to that country, the Chamber notes in a press release. Of the total of 213 million euros in cheese exports, 40% corresponded to products from Ciudad Real, which also exported 23.4 million euros in milk and dairy products to the United States. The report from the Ciudad Real Chamber of Commerce indicates that, in 2023, the United States was the eighth market for exports of goods from Castilla-La Mancha, reaching a value of 319 million euros, which represents 3.2% of total regional exports. At the provincial level, the United States was the seventh destination, with exports valued at 94 million euros, which represents 4% of Ciudad Real's exports. In an analysis of the region's exports during Donald Trump's first term (2017-2020), it is observed that this period did not have a negative impact on Castilla-La Mancha's exports to the United States. On the contrary, the report indicates a general boost in exports, especially in the industrial and technological sectors, although with some exceptions in plastic products and aluminum. At the provincial level, exports of industrial and technological products to the United States increased significantly during the Trump administration.
CAME
In the wine sector, the United States was the eighth market for Castilla-La Mancha in 2023, with exports worth 17 million euros. Ciudad Real leads the region's wine exports, representing 56% of the total wine exports of Castilla-La Mancha, with 415 million euros in 2023. Ciudad Real exported Beverages of all types (except juices) to the United States worth 15.5 million euros in 2023.
TENSIONS AND PROTECTIONISM
In this analysis, the Chamber examines how the virtual triumph of Donald Trump and the application of the announced policies could affect both the global economy and key export sectors for Castilla-La Mancha and Ciudad Real, “in a context of trade tensions and protectionist economic policies.” The report notes that on November 5, Americans not only elected their president, but also renewed the chambers of Congress and the Senate, which have historically been a political counterweight to presidential power. Although the count has not yet been completed, preliminary data indicates a Republican majority in the Senate, which could give the GOP control of both chambers and the presidency. This political context, together with the conservative majority on the Supreme Court and the control of key organizations and institutions, could make Donald Trump one of the most powerful presidents in recent decades. “A battery of protectionist trade measures and expansionary fiscal measures and more restrictive immigration policies would probably raise inflation in the country. And higher prices could lead the Federal Reserve to have to raise interest rates in 2025, which would not be good for global economic growth,” the Chamber said. As this chamber body describes, the United States economy has shown a significant recovery after the COVID-19 crisis, “with solid levels of economic and employment growth.” Innovation and productivity continue to be strengths of the US economy, which has managed to stabilize against the inflationary shock. However, the report warns of several important fiscal imbalances, such as the deficit in public accounts and external accounts, in addition to certain fragilities in the financial system. These factors could have adverse effects on both the US economy and the global economy. The economic programs of the two main parties (Republican and Democrat) propose policies that would imply the maintenance of high public deficits and growing levels of public debt. In particular, the Republican Party, led by Trump, “has taken a more aggressive stance toward economic isolationism.” According to the report, both sides will continue to boost economic growth in the short term through fiscal support policies. However, the report warns that long-term protectionism could further fragment the global economy, negatively affecting the United States and its main trading partners, including the European Union.
TRADE POLICY
Regarding trade policy, the Ciudad Real Chamber of Commerce highlights that a protectionist approach is foreseeable in the United States to reinforce national security and support local industry. “President Trump has expressed his intention to impose a universal tariff on all products: 60% for those from China (even higher for certain products, such as electric vehicles), 20% for the rest of the world and a 100% for countries that reject the use of the dollar in international trade.” Trump's strategy is reminiscent of his first term, in which he used trade barriers as a negotiating tool to obtain concessions from his trading partners in return. In the area of multilateral trade, the report highlights that this US protectionist policy departs from the free trade model promoted by the European Union. The Ciudad Real Chamber of Commerce warns that a worsening of trade tensions could harm the EU. However, an open conflict between China and the United States could benefit certain European countries if there is a diversion of international trade through other routes. In 2023, the United States reduced its trade deficit with China while increasing its deficits with other countries, such as Mexico, Germany, South Korea, Taiwan, Italy and India, demonstrating its “nearshoring” strategy. Trump could try to bilateralize trade relations with EU member states, seeking to weaken their negotiating power. In any case, “it seems clear that it would undermine Western cooperation in international organizations such as the WTO and reduce the role of multilateralism in trade relations.”
