LIVE MARKETS-US trade embargo on Spain possible but harder than it looks - UBS
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US TRADE EMBARGO ON SPAIN POSSIBLE BUT HARDER THAN IT LOOKS - UBS
U.S. President Donald Trump's threat to halt trade with Spain could likely end up being just that. The UBS equity strategy team say in a note this week that an individual trade embargo would technically be possible, but limited in terms of its real-world effectiveness.
The main issue is Spain is part of the EU, which negotiates trade terms and tariffs on behalf of member states, which cannot then be individual targets for duties.
Treasury Secretary Scott Bessent on Wednesday said the administration would begin investigations into how to penalise Spain under other trade laws.
In the event of an individual embargo on Spain, UBS say the EU could respond in a number of ways, including counter-tariffs on U.S. goods, increased regulatory scrutiny on U.S. firms operating in Europe, and a potential WTO challenge on non-discrimination grounds.
Spanish companies could also potentially shift final processing, packaging or distributing to other EU countries.
In UBS's view, effectiveness would vary sector by sector.
"...traceable, highly regulated industries (pharma, autos, industrial goods) could be more tightly enforced, whereas agri-food and blended-input consumer products would be far harder to police", they say.
The U.S. actually had a trade surplus with Spain for the fourth year in a row in 2025, at $4.8 billion, according to U.S. Census Bureau data. U.S. exports of crude oil and liquefied natural gas to Spain have grown in recent years.
"From a listed-company perspective, the most exposed Spanish names are those with high U.S. goods-export-related exposure," says UBS say.
They mention steel manufacturer Acerinox ACX.MC, U.S.-listed silicon metal producer Ferroglobe GSM.OQ, food producer Ebro Foods EBRO.MC, and healthcare company Grifols GRLS.MC
(Lucy Raitano)
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