On the occasion of the inauguration of the 47th President of the United States, Donald Trump, on January 20, 2025, and his campaign promises to implement protectionist policies in US trade, Eurobank analysts have provided insights into the potential effects on the Greek economy. These effects are outlined in the weekly bulletin “7 Days Economy,” using the most recent trade data between Greece and the US.
In the 11 months from January to November 2024, the share of the US in total Greek merchandise exports was around 4.8% or €2.19 billion at current prices. However, the impact of any potential protectionist policies by the US may not be limited to direct effects on Greek exports but may also have indirect repercussions. These could stem from Greece’s trade relations with the European Union (EU), where around 20% of EU-27 exports are purchased by US entities.
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According to the latest trade data from Eurostat, Greek exports of goods to the US during this period amounted to €2.19 billion, while imports from the US stood at €1.99 billion. As a result, Greece had a trade surplus with the US of €203.5 million. When breaking it down by category, food and live animals showed the largest surplus at €521.6 million, while fossil fuels, lubricants, and related products recorded the biggest deficit at €399 million.
The share of Greek merchandise exports to the US stood at 4.8% in the period from January to November 2024, slightly above the long-term average of 4.5%. For the entire year of 2024, Greek exports to the US are expected to account for 1% of Greece’s GDP. Among the product categories, the US accounted for 7.7% of Greek food and live animal exports, followed by oils and fats (7.2%), machinery and transport equipment (6.5%), and manufactured goods mainly classified by raw materials (5.1%).
A potential increase in tariffs on products imported by the US from the EU-27 could negatively affect some of these Greek exports, particularly in the food and live animals sector, oils and fats, and machinery. For 2024, Greek exports of goods to the US are projected to reach 1% of GDP or approximately €2.4 billion. The extent of the impact on Greek exports will depend on the magnitude of any tariff increase and the elasticity of demand for Greek goods in the face of such price hikes.
Indirect Effects Of Greece’s Trade Relations With The EU
In addition to the direct impact on Greek exports to the US, protectionist measures from the US could also have indirect effects on the Greek economy. This is due to the interconnected nature of Greece’s trade with the EU-27 and the EU’s trade with the US. In the period from January to November 2024, the EU-27 accounted for approximately 55.3% of Greek merchandise exports, or €25.4 billion. The US, in turn, represented 20.6% of EU-27 exports, totaling €490.1 billion (excluding intra-EU trade).
A potential tariff increase on EU-27 exports to the US could lead to:
- A reduction in EU-27 exports of goods to the US.
- A decrease in the income of EU-27 businesses.
- Lower Greek exports of goods and services to the EU-27.
Furthermore, a portion of Greek exports to the EU-27 consists of intermediate goods used in the production of final products that the EU-27 exports to the US. This adds another layer of potential impact on Greek exports through participation in European value chains.
