Tariffs threaten employment in the Algarve and North of Portugal

A study from Bruegel has compared the effects of US tariffs on employment at a regional level in the European Union and suggests that the impact in the North of Portugal and the Algarve regions would have significant economic but manageable costs.

Bruegel, a public European think tank based in Brussels, looked at the impact of US tariffs on industrial European regions that are most dependent on the exports of goods produced in the EU.

Bruegel looked at two regions in Portugal – the Algarve and the North of Portugal – and the estimated impact on jobs was in line with with the European average which the think tank’s economists say could be “significant but less than the shocks such as the pandemic or the energy crisis after Russia’s invasion of Ukraine.

However, Bruegel does not show estimates of job losses linked to the tariffs, simply comparing the different regions.

The researchers found that Ireland and Italy would be most affected although the overall global effect would be limited.

But the impact of the tariffs “could be problematic” if they are concentrated on certain European regions.

In terms of the Algarve and the North of Portugal, “it is likely that the impact in these regions is in line with the average because these regions and the average of EU regions are not highly exposed to tariffs, with large proportions of employment in exporting industries, unlike what happens when compared to Ireland, for example. In Ireland, there are several industries that export a high proportion of their product to the United States but the consequences could be significant but manageable”.