Trading Blows - Embracing Beneficially

The World continues to recoil over President Trump's self-titled Liberation Day (2 April 2025), where new tariffs were imposed in a rebalancing of trade to boost American industry.

European and Asian stock markets continue to plunge and Goldman Sachs are now reporting a 45% risk of US recession in the next year.

Gibraltar has got off relatively lightly (with a 10% tariff on exports to the US), with Observatory of Economic Complexity statistics showing that we export far less (USD650k) than we import from the US (USD186 million, mostly petrol). Given an expectation that tariffs will be based on rules of origin rather than place of exportation (with Gibraltar not being a manufacturing or assembling hub), the Gibraltar Government believe it shall have little material effect on Gibraltar trade.

Other jurisdictions have not been as fortunate (notably China [54%], a host of South East Asian companies, including Vietnam [46%], Cambodia [49%] and Thailand [36%], amongst others). Even in relation to its geography Gibraltar has fared well, by being aligned with the UK (at 10%) rather than the higher rate of 20% imposed on EU countries. Hopefully it speaks of a potential enhanced relationship with the US, in line with UK's own preferential trading designs with the US.

Gibraltar boxers were also recently trading blows (on 29 March 2025). Brothers Kriss and Evan Montegriffo marked their professional debuts, and existing professional, Tyrone Buttigieg, his home debut, with very well taken and received wins.

As these gentlemen ably demonstrated, Gibraltar's agility allows us an opportunity to continue to punch above our weight.

Whilst clearly not being able to go toe-to-toe in an exchange of economic blows with the US, the answer may lie in finding a way to bring the contest ‘inside’, where Gibraltar's ease of access to key executive, legislative and regulatory decision-makers (and therefore the opportunities for creative synergy) may allow us to embrace with the US in a mutually beneficial way.

The Government says the tariffs will likely be of no effect whatsoever to Gibraltar, as goods are likely to be assessed for tariffs based on rules of origin rather than place of exportation, and Gibraltar is not a manufacturing or assembling hub. It says it expects the special relationship between Gibraltar and the US to continue, and notes that the UK is pursuing a new trade relationship with the US. www.gbc.gi/...