Panayiotis Rougalas
The first reaction in Cyprus to Trump’s tariffs was the worry that halloumi, salt, and olive oil would become more expensive. But let’s be honest, will a $2 increase in the price of already pricey halloumi in the U.S. really impact the average Cypriot or the restaurant buying it? If a pack costs $12 now and goes up to $14, it’s hardly earth-shattering. The same goes for salt and olive oil.
But that’s not the real issue. Yes, Cyprus’ already small exports will be affected, but not in any dramatic way; no one’s sugar bowl is going to shatter, so to speak (even though sugar may also go up in price due to the tariffs).
The deeper problem lies elsewhere, and it’s not strictly tied to Trump’s policies. Cyprus needs to take a hard look inward at its own decisions, which too often assume that the economy will always be booming. Just a few weeks ago, Parliament passed a bill lifting the freeze on new hires in the public and semi-public sectors. That bill had been under discussion since early March, weeks before Trump’s global tariffs were announced, with lawmakers arguing that Cyprus was doing well financially and could afford to make such a move.
Fast forward a few weeks, and the entire world is shaken by the impact of the new tariffs and fears of another global economic downturn. Meanwhile, Cyprus is still insisting it’s in a great financial position and pushing ahead with decisions based on that belief.
The idea that everything can turn upside down overnight still hasn’t sunk in. Policy decisions in Cyprus should be made assuming modest, steady economic growth, not based on good times alone. That way, if things take a turn for the worse, we’re not caught off guard. But judging by recent decisions, especially the salary increases in the public sector, that mindset hasn’t changed.
History has shown that in any crisis over the past 15 years, it’s the private sector that bears the brunt, first to be hit, last to recover (if it ever fully does). Decisions for the public sector should be setting the right example, not clinging to sunny-day optimism. Of course, we shouldn’t make decisions assuming constant disaster, but having an umbrella handy just in case isn’t a bad idea either.
Trump’s 90-day “trial period” before the tariffs fully kick in offers the Cypriot government a chance to prepare. Three whole months to come up with a solid plan. It’s time for Cyprus to stop chasing after developments and finally take control of the situation with a smart, forward-looking strategy.
