Cyprus officials expressed confidence on Thursday that the country would avoid immediate economic damage from sweeping new U.S. tariffs, even as European leaders prepare countermeasures and economists warn of potential global recession risks.
Cyprus government and business leaders suggested the country’s limited exports to the United States would shield it from direct short-term consequences of the controversial tariffs announced by President Donald Trump’s administration.
The European Union faces a 20% tariff under the new measures, while China (34%), Japan (24%), India (26%) and Switzerland (31%) will see even higher rates. Additionally, a 25% tariff will apply to all imported vehicles and parts.
“Our exports to the U.S. are limited, but this is an extremely worrying development as it essentially undermines trade relations that have existed for many years between the U.S. and the rest of the world,” Deputy Government Spokesman Yiannis Antoniou told state broadcaster CyBC.
The government did not issue any formal statements on the tariffs, with the finance ministry remaining silent on a development that has sent shockwaves through global markets and prompted international backlash.
European Commission President has already indicated the EU will respond to the American president’s action, Antoniou noted, adding that “reactions are coming from countries around the world.”
Cyprus will adopt and implement all measures the European Union takes in the coming period to address the new circumstances and respond to the American decision, according to finance ministry sources.
While government officials and economic bodies expressed confidence in Cyprus’s ability to weather immediate impacts, they acknowledged that if the emerging trade war persists and intensifies, the broader political-economic consequences would have global reach and eventually affect the Cypriot economy.
Cyprus exported goods worth 22.67 million euros ($24.45 million) to the United States from January to November 2024, according to the latest figures from the Statistical Service. The country also re-exported products worth 27.07 million euros during the same period.
Approximately 123 types of products exported to the U.S. will be affected by the tariffs. The biggest impact will be on cheese producers, fish farms, and companies dealing in electrical products, communications, juices, wines, virgin olive oil, coffee, cocoa, and even salt.
Dairy products—including halloumi cheese—represent the largest portion of Cypriot exports to the U.S., valued at over 6.4 million euros. Electrical products like resistors follow with slightly more than 3 million euros, though these items are also Cyprus’s top re-export to the U.S., valued at over 21 million euros. Extra virgin olive oil also ranks high on the list.
The Federation of Employers and Industrialists (OEB) Director General, Michalis Antoniou, told philenews that Cyprus would not face significant direct impacts but noted that the European Union and major European economies, already facing challenges, would be hit hard. He added that there will be effects on stock markets and some sectors will face competitiveness problems, however, he expects the new decisions by the U.S. to bring new trade alliances for Europe. “There will need to be a reorganisation of priorities there, and we will see how the EU will support these economies based on the new data,” he said.
Antoniou noted that any recession or slowdown in the global economy would inevitably “touch” Cyprus as well.
Former Democratic Rally (DISY) president and current MP Averof Neofytou warned against complacency, drawing parallels to the 2008 financial crisis when governing officials believed the global economic crisis would not affect Cyprus.
“Our economy, although comparatively very small, will inevitably be affected, even if with some time delay. We must prepare as best as possible and make the most of the time that will pass before the impact reaches Cyprus,” Neofytou said.
“The worst-case scenario is a complete lack of willingness for dialogue between the major economies, resulting in the global economy entering an endless war of tariffs and counter-tariffs, leading to a never-ending vicious cycle. This will result in increased inflation and will sink national economies, and inevitably the global one, into recession,” he added.
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