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The Mallorcan small to medium business association PIMEM is concerned about how Donald Trump’s victory may affect global economic policy, especially in Europe. The association points to Trump’s tariff and protectionist policy as a primary concern, which will seek to boost the US economy at a direct cost to Europe. The association highlighted that the dollar has risen by 1.75%, showing the consensus of the markets and betting on a strong dollar.

For the vice-president of PIMEM, Rafel Matas, “this has consequences for European SMEs and tourist markets. We are talking about exports at risk, weakening the economic engines of countries such as Germany and the United Kingdom, Mallorca’s main markets. It should be remembered that EU exports to the US represent 18% of the European total. Although the strong dollar lowers the price of European products to the US, the policy of tariffs and barriers to importers could make them less competitive.”

On the other hand, PIMEM is concerned, according to different statistical publications, that the American population has suffered a reduction in its purchasing power due to inflation, which could affect the consumption of imported products if they are taxed. For the president of the association, Jordi Mora, “this has a particular impact on exporting SMEs, which will have to adjust their strategies if they want to stay in the North American market. We are talking about a higher cost of exports to the US and of imports from this country.”

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Another aspect familiar to the vast majority of European exporting companies stems from Trump’s slogan: ‘America first’. For Rafel Matas, these are not mere slogans and “the probable introduction of trade tariffs in different sectors will make it difficult for European companies to access American markets and may influence the tourist markets that send tourists to the Balearics’.

On the other hand, PIMEM has pointed to a possible increase in tourists from the already growing American market due to the strength of the dollar and improved air communications. With regard to communications and logistics, Matas points out that “the securing of international supply lines promoted by the EU since the Covid period will now have a new added factor in the search for growth in friendly and strategically secure markets. Europe will have to seek new trade agreements and alliances.”

The domino effect which, according to the employers’ organisation, could occur if the EU responds to the introduction of tariffs by also imposing tariffs on external products, such as those recently introduced on cars imported from China, should not be ruled out. For Matas, “the EU will have to move more quickly towards protectionism, as aggressive exporting countries will try to compensate for the loss of the US market by exporting to Europe”.

The employers’ organisation stressed that this was already pointed out in the plan presented by Draghi for the EU a few months ago, on economic competitiveness and the EU’s new industrial strategy. The Vice-President said that “open world trade governed by multilateral institutions seems to be passing”.
Matas stressed that “a joint plan for decarbonisation and competitiveness could entail, in specific circumstances, defensive trade measures to offset state-sponsored competition abroad”. “The election of Trump will undoubtedly aggravate this whole process,” the PIMEM vice-president said.