The trade battle between the United States and China, aggravated by the exchange of tariffs announced in the last few days by both countries, is raising the tension in international markets to the maximum and anticipates a scenario of domino effect that could be critical for a handful of strategic sectors in Europe, whose activity depends to a large extent on exports. Agriculture, for example, is set to become one of the worst affected, as a result of its complex profitability, linked to sales volumes that are normally achieved through external markets, and to production costs that will increase in the coming months.
With the rise in the price of energy and agricultural equipment on the horizon, it remains to await the position of US President Donald Trump regarding the tariffs he plans to apply to the European Union – anticipated at the Davos forum just a few days ago. Their possible impact is not a minor matter, insofar as the continental economy is based on an export dynamic that generates 55% of its GDP and finds its main buyer in the American giant.
Europe’s dependence on the United States in this respect is significant. According to Eurostat data, EU exports to the North American country in 2023 represented 19.7% of the total exports made by the community bloc, exceeding 576 billion euros. The U.S. government itself, through its Department of Commerce, recognizes a deficit in its trade balance with the Eurozone that rose in 2024 to over 213 billion.
In this relationship, agriculture plays a key role in which Spain has much to say. The EU and the United States maintain a solid agricultural trade bridge that makes Washington the second largest recipient of European raw materials and, in turn, makes us recipients of fruit, cereals and other agricultural products of American origin worth 11,000 million euros.
The memory of Trump’s first tariff stage with respect to Europe, which took place in 2019, still remains vivid in the retina of many Spanish agricultural companies, which saw how some of their products faced rates of 25% to continue accessing the U.S. market. The wine, olive oil or citrus fruit sectors were heavily penalized by a measure that was largely the result of an aeronautical dispute that had little to do with the agricultural market. However, although the current context differs from that of the past, the forcefulness of these measures allows us to project the scope of what may happen.
It is therefore urgent that our companies protect themselves against the collateral damage of a trade war that is expected to last a long time. Market diversification in terms of agricultural exports is a key strategy for minimizing damage. The context invites us to bet on emerging destinations that in recent times have shown solvency in the reception of our products, and that do not pose an excessively severe entry framework.
An example of this is the case of some of the leading Spanish wine companies, which after being damaged by the tariff crisis of 2019 and the effects of the subsequent pandemic, boosted their presence in countries such as South Korea, Canada, India, Malaysia, Taiwan, or the African continent, reducing their dependence on the predominant markets while strengthening their income statement.
Promoting the competitiveness of our agribusinesses also involves making more and better visible the quality of their products, which in many cases is differential despite not enjoying international notoriety. In this sense, it is remarkable the work done for years by Almendrave and CNCFS to promote the virtues of European almonds, often relegated by the importing trend of Californian almonds.
In any case, the commercial strategy must go hand in hand with a firm commitment to technological innovation. And this is another factor destined to make a difference in the scenario facing our agriculture. Digitalization is emerging as a direct way to increase the profitability of crops through so-called precision agriculture, based on the millimetric adjustment of energy expenditure thanks to the high technology applied to the field, in order to reduce production costs as much as possible. In this respect, Spain is in a privileged position to increase its value proposition in new markets because it has what is most important: resources and innovative talent.
Drones, remote measurement systems or predictive AI tools to optimize harvests make possible the conception of a new agriculture that is sustainable and transparent in its processes. This not only represents a clear competitive advantage over production environments with less regulation -very close and increasingly questioned-, but also makes it possible to achieve quality standards that facilitate the opening to premium markets, characterized by a higher and better value for certified products.
The tariff war, far from representing a mere unexpected misfortune, is a symptom of a changing world trade order. It must be accepted. For the European agricultural sector, survival will depend on its ability to reinvent itself around its processes and objectives. In Spain, the commitment must be along these lines, but institutional involvement will be even more essential. Technological innovation and market diversification require investment and diplomacy, as well as facilitating frameworks that enhance the possibilities of small players. Shielding our agriculture will require a spirit of change, but also a high dose of responsibility.