The tariffs imposed by the Trump administration on the European Union are expected to have direct and indirect effects on the Greek economy, with the government closely monitoring developments. Although Greece is not one of the countries that will be hit the hardest, the secondary effects on tourism and industry are a concern.
The Greek government is maintaining a cautious stance, waiting for the EU's reaction, as it is bound by EU trade policies. A government meeting is planned within the week, where all scenarios and possible ways of dealing with the new trade data shaped by US policy will be examined.
Despite the uncertainty, the Greek government does not appear particularly worried about the immediate consequences of the tariffs, as exports to the US amount to around €2 billion - equivalent to just 1% of GDP. This amount is not considered sufficient to cause serious shocks to the economy, which continues to grow.
However, the big concern is about the indirect consequences. The economic burden on European countries that export massively to the US may reduce disposable incomes and, by extension, affect the demand for tourism services - one of the main pillars of growth of the Greek economy.
While Greece has a trade surplus of only 610.5 million euros from its trade with the US (mainly food), other European countries are much more at risk from a trade war with Washington.
- Germany: With exports to the USA exceeding imports by EUR 85.7 billion, German industry (mainly automotive and heavy industry) is particularly exposed.
- Italy: Its trade surplus with the US is close to EUR 42 billion, mainly from machinery, fashion, chemicals and agricultural products.
- Ireland: With a surplus EUR 29.4 billion, is heavily dependent on exports of pharmaceuticals, cosmetics and technology products to the US.
These countries are likely to be targeted by increased US tariffs, which may cause turbulence in the European economy and consequently affect Greece.
The biggest risk comes not from Greece's direct trade relations with the US, but from the indirect effects on the European market. If the major EU economies suffer losses, then the economic climate will deteriorate, affecting:
- Tourism: Reduced consumer power in Greece's client countries could hit tourism, one of the most dynamic sectors of the economy.
- Industrial products: If Chinese companies redirect their exports to Europe due to US tariffs, Greek industry may face increased competition.
- Wider economic environment: Global trade tensions could lead to a reduction in investment and a slowdown in growth, with repercussions across Europe.
The Greek government believes that the best defences against trade shocks are the strengthening of the domestic economy and the diversification of productive sectors. According to a member of the economic staff, Greece should continue to focus on:
- Reducing the investment gap, to attract more foreign investment.
- Increasing productivity, to make Greek businesses more competitive.
- Diversification of the production base, reducing dependence on a few sectors such as tourism.
- Strengthening technology exports, exploiting the country's competitive advantages.
- The consolidation of Greece as an energy hub, to export more energy and take advantage of its geostrategic position.
The escalation of the US-EU trade war remains uncertain, but the Greek government is seeking to adapt to the new circumstances by promoting a long-term plan that will shield the country's economy.
The Greek economy may not be directly exposed to the US tariffs, but the impact on tourism, investment and the general economic climate in Europe is likely to pose challenges.
The key issue is to manage the indirect impacts through a strong growth framework focusing on investment, innovation and diversification of the economy. Greece needs to move strategically, strengthening its international position and reducing its dependence on factors beyond its control.