Spain worries companies would relocate to Morocco due to U.S. 20% tariff

A recent report from the Spanish news website OKdiario highlights concerns over companies in Spain potentially relocating to Morocco due to the recent 20% tariff imposed on Spanish products by the U.S.

It stated that starting next week, exports from Spain to the U.S. will become 20% more expensive due to new tariffs imposed by Trump on EU goods, but products from Morocco will face much lower tariffs, only 10%.

“The new tariffs create a clear competitive advantage for Morocco, with both economic impact and geopolitical implications,” said the same source.

OKdiario argued that the competitive advantage Trump gave Morocco “will create a problem for Spain, as it will impact products that are important to their trade balance with the U.S. and are either produced or could be produced in Morocco.”

It pointed out that for years, companies have moved production to Morocco to sell in Spain, like Moroccan green beans in supermarkets. With the trade war, these companies now have a clear advantage in both the Spanish and U.S. markets, making it harder for Spanish production to compete.

This raises concerns about Spanish companies, or those based in Spain, relocating to Morocco. The outcome will depend on how long the trade war lasts and how investors perceive the benefits of settling in Morocco for an advantage in international trade, according to the same source.

While not all sectors will likely move, agriculture has significant potential in Morocco, with lower production costs made more attractive by tariffs, stated OKdiaro.

It argues that relocation is easier for some industries, such as pharmaceutical labs, which are simpler to move than car factories due to differences in size and complexity.

In addition to fears of medium-term production relocation, the same source mentioned that the tariffs make the US see Morocco as a cheaper supplier than Spain for products made in both countries.