A plan to alleviate the initial impact of tariffs on companies in the Islands, with three lines of action and an initial allocation of 6 million euros

The Government has convened a meeting with economic and social agents of our islands to address an issue that concerns this Government: the impact on our economy of the tariff policy of the United States.

The President of the Government of the Balearic Islands, Marga Prohens, has announced a shock plan to alleviate the impact of tariffs on the Balearic business sector. She made this announcement at the meeting that the government has convened with economic and social agents of the Balearic Islands to discuss the impact on the economy of the United States tariff policy.

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President Prohens announces a shock plan to alleviate the impact of tariffs on the Balearic business sector

The President was accompanied by the Vice-President and Minister of Finance, Economy and Innovation, Toni Costa; the Minister of Enterprise, Employment and Energy, Alejandro Sáenz de San Pedro; the Minister of Agriculture, Fisheries and the Environment, Joan Simonet; the Minister of the Presidency and Public Administrations, Antònia Estarellas; and the Minister of Tourism, Culture and Sports, Jaume Bauzà. The meeting was attended by representatives of business associations, trade unions, agri-food cooperatives, ASAJA and Unió de Pagesos.

In view of this situation, the President announced a short-term shock plan – for the next four months – to alleviate the initial impact of the tariffs on our companies. In addition, work will continue to analyse the evolution of the situation and to take measures in the medium and long term.

The plan consists of three lines of action and has an initial allocation of 6 million euros. Firstly, a line of 3.5 million euros in aid for the competitiveness and export of companies. According to the calculations of the Direcció General d’Economia i Estadística, this would be the cost for companies of assuming the tariffs during this period and being able to continue competing with the same prices in their exports to the US market.

As for this line, it can only be effective if the European minimum regulation (minimis), which limits aid to companies, is suspended. This is a demand by the Government to request a relaxation of this de minimis rule to deal with the additional costs incurred by companies on the Islands as a result of their insularity. This claim will be presented by the Minister of Enterprise tomorrow, Thursday, at the meeting with the Minister of Economy.

Secondly, the president announced an extraordinary investment of 2 million euros in the promotion of local products, especially agri-foodstuffs, both internally and in commercial markets of origin, such as Spain and European countries like Germany, France and the Netherlands. ‘If there is the indirect effect of greater competition from products that are now exported to the United States and are looking for new markets, we need to promote our products as much as possible in these markets,’ said Prohens. In this sense, work will also be carried out with the island councils to ensure that the 3% consumption of local products by tourist establishments on the islands is enforced.

Thirdly, an initial contribution of 500,000 euros to set up trade missions to open up new markets for exporting our products, mainly in Asia and Latin America (Mercosur), in collaboration with the chambers of commerce and with the financial support of the Government.

Effects of tariffs

According to data from the Government’s Directorate General of Economy and Statistics, the United States is the ninth country that imports the most goods from the Balearic Islands, with a total value over the last eight years of 312 million euros, mainly from the manufacturing industry, such as footwear and soap, or from the agri-food industry, especially locust bean gum. It should also be noted that the Balearic Islands is the third country from which the Balearic Islands imports the most goods.

Tomorrow, Thursday, a meeting will also be held with all the parliamentary groups to address this issue and explain the shock plan to alleviate the impact of tariffs on the Balearic business sector.