Spanish economy notches up second-best performance in eurozone as US tariffs start to bite

The trade war with the USA is already impacting growth in the eurozone economy. Data confirmed last Friday by the European statistics agency, Eurostat, shows that the single currency bloc advanced only 0.1% in the second quarter, coinciding with the start of the tariff war and abruptly halting its 0.6% growth achieved in the first quarter of this year. Compared to a year ago, the eurozone's gross domestic product (GDP) growth rate rose by 1.5%, one-tenth less than in the first three months of 2025 and well below the 2.1% year-on-year growth rate of the United States during the same period.

In this context, Spain's strong performance is particularly noteworthy, remaining in second place among the eurozone countries with the fastest growth in the second quarter. Eurostat confirms the data released a few weeks ago by Spain's INE national statistics institute, which revealed that the Spanish economy grew at a rate of 0.7% between April and June, one-tenth of a percentage point more than in the first quarter. Spain is only behind Croatia, which advanced by 1.2%, but Spain's growth is well above that of the major European powers to date. France only achieved 0.3% and the Netherlands managed 0.1%. More concerning, Germany and Italy again recorded GDP declines of -0.3% and -0.1% respectively. Finland also dropped back, in its case by 0.4%, the euro country to fare the worst in the second quarter.

Spain is on par with the United States on a quarter-on-quarter basis (the US powerhouse grew by 0.8%, just one-tenth of a percentage point above Spain), and even above it when looking at year-on-year, as Spain grew by 2.8% compared to 2.1% for the US. In fact, the US has experienced a significant rebound in the second quarter of this year, having started the year with a -0.1% drop due to the boom in purchases made from other countries in anticipation of the tariffs that Donald Trump was beginning to threaten.

This strong performance by the US is likely to be tempered by third quarter data, as US employment figures are already recording the first job losses since 2021. The poor results are fuelling expectations of a rate cut by the US Federal Reserve.

At the European level, the main contribution to GDP came from public consumption, although private consumption also had a positive impact. In contrast, exports had a negative impact on GDP performance. Eurostat data reveals that foreign sales fell by 0.5% in the eurozone, while imports remained stable, reflecting once again the negative impact of the tariff war.

The news is not so good for Spain in the employment arena. The country also remains at the top of this ranking, but this time for a more negative reason: unemployment. Still, as is evident, with higher levels of unemployment, the labour market has the potential for more growth. On this point, Spain recorded the highest employment growth in the second quarter. Eurostat revealed that the employment rate grew by 0.1% in the eurozone, while in Spain it shot up by 0.7%.

In total, 171.6 million people are employed in the eurozone, a figure that rises to nearly 220 million across the entire European Union - an all-time high.