OVIEDO, Spain

Spanish Prime Minister Pedro Sanchez on Thursday announced a €14.1 billion ($15.5 billion) plan to protect and modernize Spain’s economy in response to US tariffs.

“The goal is to overcome this blow and make sure that the nonsense of certain leaders isn’t paid for by the same social majority as always,” Sanchez said in a speech.

“We can come out stronger – take advantage of this trade war, even if there are agreements soon, to give our businesses a fresh impulse for modernization and internationalization.”

Sanchez said €7.4 billion of the plan will come in the form of new financing, while the rest will be drawn from existing instruments.

He said the funds will be used to support affected Spanish businesses and workers and to reorient the economy toward new markets and sectors.

As an example, Sanchez said the government would support the automotive components sector – expected to be impacted by the tariffs – in pivoting to the defense sector, where significant EU investment is expected in the coming years.

“The trade war is terrible news for the whole world, the US included. … Europe is receiving hybrid attacks from (Russian President Vladimir) Putin in the East and the US trade war from the West,” he said. “But that doesn’t mean we’ll stop growing and progressing.”

Sanchez noted that Spain, under his administration, has emerged economically stronger through the COVID-19 pandemic, the ongoing Moscow-Kyiv war, and the inflation crisis.

In 2024, the Spanish economy grew 3.2% – around four times more than the EU average.

“Where others see obstacles, I see opportunities,” said Sanchez, the Socialist Party leader with a PhD in economics.

Spain will advocate for the EU to allow more flexibility for governments to support their economies, use tariff income to create a fund for hard-hit sectors, revise regulations to assist affected businesses, and ratify the Mercosur trade deal with South American nations, he added.

The Southern Common Market, also known as Mercosur, was founded in 1991 and comprises Argentina, Bolivia, Brazil, Paraguay, and Uruguay.

Sanchez said he is certain that Spain and the EU will overcome this “unjust and unjustified crisis.”

“And we will do it without renouncing our values. We are convinced that questions like social justice, equality and diversity, multilateralism, sustainability and solidarity don’t drag our economy down – they are the pillars that sustain it,” he said.

“Our values are not for sale. But our goods and services definitely are," he added.

On Wednesday, US President Donald Trump announced 20% tariffs on EU imports.