In the first official reaction by Greece, Minister of National Economy Kyriakos Pierrakakis condemned the tariffs imposed by President Trump. Credit: Greek Reporter
Greek economists argue that while President Trump’s tariffs on the EU will affect Greece’s economy, the impact will be limited, as the country is not heavily dependent on exports to the US.
Trump on Wednesday unveiled expansive new tariffs in a major escalation of his trade war, with world leaders condemning his move and warning of countermeasures. Τhe new duty on the EU—and therefore Greece—will be 20 percent.
Greek products will become more expensive for American consumers, making them less competitive. Despite efforts by Greek companies and their US-based distributors to absorb part of the additional cost, the tariffs are expected to have an immediate impact.
Products expected to be hit hardest include olives, cement, aluminum, feta cheese, olive oil and canned peaches. While wine isn’t among Greece’s top 10 exports to the US—valued at around €20 million in 2024—it remains a promising market due to the high average price of Greek wines.
Greece: A historic shift towards protectionism
In the first official reaction by Greece, Minister of National Economy Kyriakos Pierrakakis condemned the tariffs imposed by President Trump.
“The announcements by the US government are self-evidently a historic shift towards protectionism and a sharp change in the way the global economic system has operated for decades. They constitute a fundamental deviation from how the EU perceives economic and social progress since its establishment,” Pierrakakis said.
He stressed that Greece is in favor of free trade. “We believe that the global economic war does not benefit anyone. And we hope that this Chapter will last as little as possible.”
He admitted that the effects on the economy will be negative but cannot be fully estimated now. “What happened is not a static but a dynamic process and it is a given that the economies of the entire planet will react in multiple ways and thus there will be not one but probably several rounds of escalation until the new economic balance is reflected.”
He said that Athens will join its EU partners for a “unified response.”
Trade balance between Greece and the US
According to recent research published in the bulletin of the Eurobank Analysis and Research Group, in the first 11 months of 2024 the weight of the US on the total of Greek exports of goods was around 4.8 percent or 2.2 billion at current prices. In the same period, the value of Greek imports of goods from the US amounted to €2 billion. Therefore, the trade balance between Greece and the US was in surplus at €200 million.
Among the individual categories of goods, food and live animals recorded the largest surplus (€521.6 million), and fossil fuels and lubricants the largest deficit (-€399.0 million).
For the full year 2024, Greece’s merchandise exports to the US are expected to stand at 1.0 percent of GDP.
Direct and indirect effects of US tariffs for Greece
The research points out, however, that in addition to direct effects, the effects on the Greek economy from protectionist policies on the part of the US may also be indirect.
Indirect effects may come from Greece’s trade ties with the European Union of 27 member states, as around 20 percent of EU-27 exports of goods are purchased by US entities.
The increase in tariffs on products imported by the US from the EU-27 could negatively affect a portion of Greek exports of goods to the US, Eurobank notes.
Specifically, in the 11 months Jan-Nov of 2024 the EU-27 share of total Greek merchandise exports was around 55.3 percent or €25.4 billion and the US share of total EU-27 merchandise exports (excluding exports between the 27 Member States) was around 20.6 percent or €490.1 billion.
The research also points out that a part of Greek exports of goods to the EU-27 concerns intermediate goods used for the production of final goods that the EU-27 exports to the US (participation of the Greek economy in European value chains). This is an additional channel through which there may be impacts on Greek exports of goods.
“Sixty-five percent of our exports go to EU member states. The new tariffs will primarily impact countries like Germany, Italy and France—Greece’s main trade partners,” the head of SEVE, Alkiviadis Kalampokis, said.
A slowdown in these economies would likely reduce consumer purchasing power, leading to lower demand for Greek exports in those markets.
Greece does not expect significant effects from US tariffs
The Governor of the Bank of Greece is also on the same wavelength:
“In Greece, we do not expect any particular effects, because the Greek economy is not largely exposed to exports to the US, but there will be indirect effects,” the Governor of the Bank of Greece, Yiannis Stournaras said recently.
“However, if tariffs are imposed in Europe and they are, for example, 10 percent, the effects on Europe’s economic growth will be in the order of half to one percentage point over a two-year horizon (estimates vary). As for European inflation, it is not expected to be substantially affected by the tariffs, however, there will be more general stagflationary trends in the global economy,” he added.
“We have calculated that Greece will show this year by ‘a growth rate of 2.5 percent, a performance that is directly related to a growth rate in the Eurozone of 1.1 percent.’ So if the rate in the Eurozone slows down, as I mentioned above, due to the imposition of tariffs, there will obviously be an impact on Greek GDP, but not a significant one,” Stournaras pointed out.
A recent study by the National Bank of Greece estimated that a blanket 10 percent tariff increase on all EU exports to the US could reduce total Greek exports by approximately 1.7 percent in real terms and lower Greece’s GDP by 0.4 percent cumulatively through the end of 2026.
Given that President Trump imposed a 20 percent tariff increase, the effect on Greece’s GDP would potentially be greater.
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