As global trade tensions escalate, Cyprus finds itself cautiously watching the unfolding trade war spurred by US President Donald Trump’s recent tariff announcements. While Cyprus may not appear to be in the immediate firing line, the island’s exporters are not immune to the shifting winds of global economics, particularly if the US expands its tariff net to include European Union nations. The consequences could be significant for some Cypriot businesses heavily reliant on the US market.
According to data from the Cyprus Statistical Service, the total value of exports from Cyprus to the US between January and November 2024 stood at €22.7 million, weighing in at 6.7 million kilograms. Additionally, Cyprus re-exported goods to the US worth €27.1 million. Despite this relatively modest figure compared to the island’s overall export profile, these numbers hint at the broader economic ripple effect. The US does not rank among Cyprus’s top 10 export destinations, but any sudden tariff hikes would still impact certain sectors—especially those with a significant reliance on American trade.
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A Diverse Export Basket, But Halloumi Leads The Way
Cyprus’ export portfolio is as varied as it is unique. From iconic halloumi cheese to more niche exports like human blood, the island offers a broad spectrum of goods. However, it’s the cheese sector, led by halloumi, that stands out. Cypriot dairy products alone accounted for over €6.4 million in exports to the US, with other prominent exports including electrical products like resistors, virgin olive oil, and even capers.
Electrical products, especially resistors, were also significant contributors, with re-exports in this category exceeding €21 million. Interestingly, human blood, though a minor player, still made its way into the data, rounding off a truly diverse range of exports to the US.
The looming tariffs cover 123 product categories, with some sectors facing more substantial consequences. Dairy, fish farming, and the electrical trade will likely feel the brunt, but industries like olive oil, coffee, and even cocoa are also at risk. In short, the scale of potential disruption depends on the product, but for businesses dependent on the US, a 25% tariff could prove costly.
Business Leaders Weigh In: Cypriot Economy Resilient, But Uncertainty Looms
To assess the broader impact of the trade war on Cyprus, Michalis Antoniou, Director-General of the Federation of Employers and Industrialists (OEB), suggests that the Cypriot economy is unlikely to face direct consequences from the US tariffs on the EU. However, he acknowledges that certain businesses with strong ties to the US market will experience challenges. Antoniou highlights that the real concern stems from the broader geopolitical instability. The ripple effects of US tariff actions, combined with regional conflicts and the potential for retaliatory tariffs from other nations, create a climate of uncertainty. For businesses operating in an increasingly volatile global economy, this unpredictability poses a significant risk, perhaps even more than the tariffs themselves.
Antoniou points out that uncertainty, paired with geopolitical unrest and the ongoing trade war, could set the stage for a global economic shift—one in which Cyprus could find itself affected despite its relatively small trade footprint. The island’s ability to weather these storms will depend on how resilient its businesses are and whether they can adapt to the evolving landscape.
As the trade war continues to unfold, Cyprus’ exporters will need to remain agile, balancing risk with opportunity in an ever-shifting global economy. The real test will be whether the island’s industries can weather the storm and continue to thrive despite the turbulence.
