1. Impact on Maltese Exports and Industry

Trump’s protectionist views, particularly his proposed high tariffs on non-US goods, are Malta’s main concern.

The proposed tariff, which includes a minimum of 10 percent on all imports (including the EU) and up to 60 percent on Chinese goods, is aimed at protecting U.S. industries.

The direct negative impact on Maltese exports going directly to the USA is obvious. But even more worrying is how this will affect global supply chains.

Malta’s economy is closely linked to global supply chains, with local companies supplying components such as electronic parts to foreign manufacturers who supply the final product to the United States.

If the US imposes high tariffs on these goods, US demand for these products will likely decrease due to higher prices. Therefore the demand for Maltese components will be less.

2. Potential EU Retaliation and Inflation

The EU is not expected to sit idly by and of course retaliate with its own measures against US goods, as it has done in the past even under the Biden administration.

This could increase the cost of American products in Europe and impact Maltese consumers and businesses that depend on US imports.

3. Flood of Products Coming from Elsewhere

Due to limited access to the US market, exporters from outside the EU will have to redirect their exports to Europe.

While this is good news for consumers, increased competition for manufacturers and service providers could put pressure on the labor market.

5. A Weaker Euro? Why Should I Care?

Higher tariffs could reduce the competitiveness of European exports in the U.S. market, which could lead to reduced demand for the euro as fewer transactions are conducted in the currency. Analysts at Goldman Sachs said the euro could lose up to 10 percent of its value against the dollar.

Here’s why you should care:

The weak euro makes imports more expensive. This situation also affects the prices of goods coming from outside the Eurozone. So are oil prices.

5. Leaving the USA?

While talk of uncoupling is a long way off, these additional expenses passed along the supply chain will ultimately make European policymakers less willing to rely on the United States as a trading partner.

The EU will likely focus on building alliances with a wide range of global players. The EU will seek to strengthen trade ties with emerging economies and, more importantly, with resource-rich regions.

This is a collaborative article spunt.mt and Lovin Malta, which puts small updates and detailed explanations at your fingertips.