This Monday, the Minister of Finance expressed his expectation regarding the application of taxes on imports promised by Donald Trump, recently elected president of the United States.
Joaquim Miranda Sarmento stated that “international trade has effects of efficiency and wealth in countries.” “Our expectation is that economic relations, especially between Europe and the United States, will remain as they have been until now,” he highlighted.
Before a meeting, behind closed doors, at the PSD headquarters in Leiria, to talk about the State Budget, the minister considered that “tariffs on imported products affect, from an economic point of view, consumers and, above all, lower-income consumers.”
“So my expectation is thatthat the United States does not launch a new wave of tariffs and protectionism“, reinforced Miranda Sarmento.
Portuguese exports to the United States represent “approximately 10% of total exports of goods” from Portugal. The governor recognizes that if the rate increase is confirmed there will be an impact on companies, specifically in some sectors that are more vulnerable, such as “the paper sector, but also the automotive components sector, among others.”
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“As an economist I understand that tariffs are bad economic policy. Let’s wait and see what the United States decides,” whether the US administration “moves forward with a plan to increase tariffs and by what amounts.”
Only after learning of Donald Trump’s decisions will the Portuguese Government act “consequently.”
Asked whether the governments of European countries should move towards a comprehensive agreement among themselves in response to US import tariffs, the Finance Minister insisted that It is still early to talk about the subject. “President Trump will take office on January 20. The US administration will then make decisions and there will surely be a dialogue, as always happens between the two economic blocs. “Europe will also make its decisions based on the decisions of the US administration,” he said.
For Miranda Sarmento, the most important thing is that Europe “looks at its problems and tries to solve them.”
“The number one problem is clearly its low productivity, especially when compared to the US economy, a divergence that began in 2008 and has worsened significantly over the last 15 years,” he said.
According to the minister, it is necessary to act on these problems. “If we are able to solve, or at least greatly mitigate, our problems, the decisions made by others will always have less impact on our lives and our economy,” he defended.
The governor also understood that a worsening of the war situation will not destabilize the Portuguese budgetwhich is based on a “sustained macroeconomic forecast, aligned with all international organizations.”
“Even the IMF [Fundo Monetário Internacional] and the Public Finance Council have more optimistic growth forecasts for next year than those that the Government included in the budget. Naturally, a small and very open economy, like the Portuguese one, is always subject to what could be external shocks,” he admitted.
Hoping that these external shocks do not occur, Miranda Sarmento believes that “the Portuguese economy will recover.” grow well and above 2% next year.”
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Source: Observadora
