Portugal announces $11B aid package to counter US tariffs

By Alyssa McMurtry

OVIEDO, Spain (AA) - Portuguese Prime Minister Luis Montenegro on Thursday unveiled a €10 billion ($11 billion) package to support export-focused companies affected by US tariffs.

Montenegro said Portugal’s “absolute priority is negotiation,” while acknowledging that the tariffs pose a serious economic challenge.

“Portugal is bound to the United States by a solid friendship and a strong political and economic relationship,” he said after a Cabinet meeting in Lisbon. “But sometimes, we must recognize that even with our closest friends, differences can arise.”

He welcomed US President Donald Trump’s decision to suspend the tariffs for 90 days, calling it a window for diplomacy. Still, he emphasized the importance of market diversification and swift implementation of the EU-Mercosur trade agreement.

The EU had been initially hit by a 20% rate under Trump's "reciprocal” tariffs. Following the reversal, EU imports to the US will be slapped with the baseline 10% rate. Steel, aluminum and cars will remain subject to a separate 25% rate.

Economy Minister Pedro Reis announced four support measures under the program: credit lines, export credit insurance, and expanded backing for internationalization efforts.

Most of the funding – €8.6 billion – will go toward credit lines for export-based businesses.

“We are not here to escalate tensions,” said Reis. “This is not a time for division but for investment and rebuilding trade bridges.”

Portugal’s initiative follows Spain’s announcement of a similar €14 billion stimulus package last week to shield its economy from the impact of tariffs.

Montenegro said Portugal would bring forward its defense spending target of 2% of GDP, initially planned for 2029, presenting the move as both necessary and strategic.

The announcement comes just weeks ahead of Portugal’s snap elections scheduled for May 18.