The 90-day pause in US tariffs on half the world has given some breathing room to the market and to companies that need to devise a new strategy to place their products abroad. With the North American country much less attractive, it is time to seek new horizons for growth, a path where Spanish companies have made progress.
However, in general, the shift in focus emphasized by all institutions, from the Government to business associations, experts, and consulting firms, is significant. In mid-2023, a study by KPMG and CEO indicated that 90% of Spanish companies considering international growth placed the United States as the most attractive market for their expansion.
In less than a year and a half, the situation has changed drastically, and although Pedro Sánchez's trip has completely shifted the focus to China, Spain is growing faster in other markets in Asia, such as India, and especially in Europe with countries like Ireland or Poland experiencing significant growth, along with nearly a dozen nations where Spanish exports have increased by at least 50% since 2019.
While not as glamorous as ham diplomacy, leveraging the European common market is one of the true priorities in the Government's roadmap and a path with far fewer legal obstacles than entering local markets with less regulatory security.
As highlighted in a study by Funcas from last year, the pandemic had a significant impact on trade in all its aspects, but intra-EU trade quickly recovered, accounting for 62% of goods exported by member states in 2022, three points higher than in 2019.
"This indicates that members are choosing to participate more in this shared market, not only for economic benefits but also for the security and stability it provides in times of adversity," point out Raymond Torres and Patricia Sánchez Juanino, authors of the text.
Spanish companies have taken note. Looking at the data from the end of 2024, national exports grew by over 10% in several neighboring countries like Ireland (14%), Malta (31.6%), Slovakia (12.8%), and Romania (18.7%).
Some of these markets, like the Mediterranean island, remain small, but others are not only billion-dollar destinations for Spanish products, but also have been on a steep upward trend since 2019, the year before the pandemic (after which many exports increased due to the global trade downturn).
In this regard, the rise in income in Eastern Europe is presenting an opportunity for Spanish companies to enter these markets. Spain has nearly doubled its exports to Slovakia in the last five years, while in Poland, the figure has surged by 50% with sales nearing 10 billion euros, a business that is 2 billion euros larger than that in China, for example.
Food products are a key sector, accounting for over 1,000 million euros in sales to Poland, but clothing also stands out, with exports to this country and Ireland doubling between 2019 and 2024, for example, as well as various types of manufactured goods in the case of Romania, another destination where exports are accelerating significantly with an increase of 1,200 million euros in the last five years.
The Spanish export boom is not limited to European markets. Among the more exotic destinations, the United Arab Emirates and Austria have seen a growth of over 30% in the last year, with the former partly due to being a major client for national defense, but India stands out above all, where Spain exceeded 2,000 million euros in sales in 2024 for the first time in its history, growing by 17% compared to the previous year.
The other major driver in the continental part of Asia is a market that is also protectionist but gradually allowing foreign companies to enter its economy. Although it results in a trade deficit of around 4,000 million euros for our country, Spanish companies are making headway.
Thus, during this period, Spain has established itself as a supplier of aircraft in the country (258 million in 2024) and chemical products, a destination that has multiplied its exports by 6,700 times since 2019. From a market that did not exist to moving 161 million euros in one of the sectors that demonstrate the economic strength of the export sector beyond the ubiquitous ham and wine.
In the plan approved by the Government on Tuesday, several lines are enabled for Spanish companies to finance these operations abroad. Notably, support for Cesce with 2,000 million euros in coverage to benefit companies affected by the tariff shock. The semi-public insurer has increased its coverage limit by 6,000 million euros to 15,000 million euros.
Additionally, the Business Internationalization Fund (Fiem) will receive a reinforced allocation of 120 million euros. This entity provides loans to companies seeking to expand into new markets. This will also be complemented by a reinforcement of Icex to enhance the information and analysis capacity of the Institute in studying opportunities for national companies in new geographies.