Newsroom
In a dramatic move that has sent shockwaves through global trade, US President Donald Trump has imposed hefty tariffs on imports from several key countries, including the European Union, Japan, India, Switzerland, and China. At a ceremony in the Rose Garden, Trump referred to the new tariffs as a “Liberation Day” for the US as he announced a series of retaliatory measures that could reshape global trade relations.
According to Kathimerini's Dorita Yiannakou, the tariffs hit European imports with a 20% charge, while products from Japan and India face tariffs of up to 24% and 26%, respectively. Imports from Switzerland have been slammed with a 31% tariff. However, it’s the 34% tariff on Chinese goods that has grabbed the most attention, as it’s part of the ongoing trade war between the two economic giants. But perhaps the most significant announcement was the imposition of a 25% tariff on all imported cars and parts, a move set to affect nearly $600 billion in goods.
What this means for Cyprus
While the immediate impact of Trump's tariffs on Cyprus may be limited, experts warn that the long-term effects could be felt throughout Europe, including the island. Cyprus doesn't rely heavily on exports to the US. Products like halloumi, fish, and some medicines make up the bulk of Cypriot exports. But Cyprus is not immune to the ripple effects of these global trade shifts.
Michalis Antoniou, the General Director of the Federation of Employers & Industrialists (OEB), told K that Cypriot companies exporting to the US could face significant challenges. “They may have to exit the US market or face losses,” Antoniou said, acknowledging the pain that many European countries will feel from Trump's tariff strategy. He added that the situation had already sparked turmoil in international stock markets, with certain industries, especially the automotive sector, set to take a hit.
While Cyprus itself may not be a major player in the US market, European countries with closer trade ties to the US will likely feel the impact much more acutely. And with Cyprus being part of the European Union, the economic fallout could affect the broader European economy as well, trickling down to smaller nations.
Europe's response
In the face of these aggressive measures, the European Commission is preparing its own response. While specifics are still unfolding, it’s clear that Europe is ready to fight back. The Commission has signaled its intention to target US tech giants, including Apple and Meta, by imposing fines for violations related to digital market laws. Additionally, the EU is set to reinstate certain measures from 2018 as a direct counter to US tariffs on steel and aluminum.
One of the key retaliatory tools the EU is considering is the "anti-coercion instrument," which would allow the EU to restrict trade in services if it believes a third country is using tariffs as a form of economic blackmail. These steps signal that Europe is gearing up for a prolonged trade battle with the US.
The road ahead
The latest figures from Cyprus's Statistical Service show that the island exported goods worth nearly 22.7 million euros to the US from January to November 2024, with cheese products, primarily halloumi, accounting for the largest portion of exports. While Cyprus may not be in the crosshairs of Trump's tariffs today, the shifting global trade landscape is likely to affect even smaller economies like Cyprus in the long run.
As Europe looks to strengthen alliances with countries like Japan, the UK, and others, the next steps will be crucial. Antoniou emphasized that Europe needs to take actions that serve the economy and not make matters worse. The global economic landscape is changing, and Cyprus, along with the rest of Europe, will need to navigate these turbulent waters carefully.
