A document sent to the Ministry of Economy by AIP has highlighted several measures recommended to the government. These measures begin with monitoring the potential redirection of production intended for the US to the European market by China and other producers affected by tariffs, which would significantly increase competition in a market that absorbs 80% of the national production’s external sales.
The association advocates for negotiating and establishing a European Union-level agreement to prevent such situations and urges the government to take an active role in bilateral relations led by the European Commission, safeguarding the specific interests of Portuguese companies.
AIP suggests implementing support instruments for direct investment and treasury, including a financial instrument backed by a public guarantee for Portuguese companies’ direct investments in the US and support for the treasury of companies whose production has been directly affected by customs measures.
Regarding employment, AIP has called for “flexible labor management mechanisms (total or partial ‘lay-off’) until trade relations are readjusted” and a “professional retraining program, emphasizing the area of international trade.”
AIP also emphasizes the need to strengthen “credit insurance protocols for companies exporting to markets alternative to the US” and to create “guarantee funds for commercial transactions with alternative markets to the US market.”
The association further suggests reallocating amounts dedicated to the STEP agenda, created by the European Union to support the European industry and boost investment in critical technologies. Part of the reallocated amount could finance the proposed support measures, with a recommended amount of no less than 500 million euros.
Companies associated with AIP, which responded to a survey, indicated plans to adopt or have already adopted several measures, including redirecting to new markets, particularly those less affected by tariff changes, and a “re-export strategy that leverages markets benefiting from lower tariffs, ensuring conditions for origin certification.”
These companies have noted “adjusting profit margins to mitigate the impact of tariffs” and aim to exploit “the difference in tariffs between the EU (20%) and China (34%) to compete in specific market segments.”
Additionally, the companies consider “enhancing internationalization by investing directly in the US” and “implementing continuous improvement processes to reinforce competitiveness through cost reductions” as well as “improving internal capacities in international trade knowledge.”
The Ministry of Economy is set to meet with business associations from various sectors between today and Wednesday to assess “the impact and mitigation measures” of the tariffs announced last Wednesday by US President Donald Trump. These tariffs impose a 20% levy on products imported from the European Union, adding to the existing 25% on the automotive, steel, and aluminum sectors.
Trump’s new tariffs are described by the US President as an attempt to grow the US industry while penalizing countries for what he claims are years of unfair trade practices.
