Atlantic Headwinds Put Portuguese Exporters’ U.S. Profits Under Strain

Portugal’s exporters are counting the cost of selling across the Atlantic. Fresh data show that the once-buoyant flow of goods to the United States is losing steam, prices are stickier than hoped and margins are being squeezed from every angle. From chemicals in Aveiro to leather shoes in Felgueiras, companies are discovering that the post-pandemic boom has given way to a more hostile trading climate.

A Wake-Up Call for Portuguese Exporters

A new assessment by the Bank of Portugal has landed with a thud on the desks of trade directors. It reveals that sales destined for the United States market grew seven percentage points more slowly than shipments to other destinations, while the average export price advanced only two points less. That gap may look narrow on paper but it signals a stark reality: the growth slowdown is driven less by prices and more by waning export volumes. Worse still, the blow falls hardest on small and medium-sized enterprises that lack the muscle to negotiate with large American buyers.

The Numbers Behind the Slowdown

Digging into quarterly customs records tells a story of sudden reversal. After expanding 8.2 % in 2023 and inching forward 1.5 % in 2024, goods exports to the US contracted 1.8 % in the opening quarter of 2025 and plunged more than 13 % once one-off aircraft deals are stripped out. By June the year-on-year fall had reached 39 %, led by an abrupt halt in chemical shipments only weeks before new American tariffs kicked in. Even a summer bounce in August, propelled by a rush of industrial supplies, could not hide the underlying fragility: without exceptional transactions, exports were down 31.7 %.

Why Margins Are Under Pressure

Several forces are closing in on Portuguese suppliers. First, the dollar-invoicing habit—roughly 40 % of contracts to the US are priced in the greenback—has turned into a headache because export prices stay frozen in dollars even as the euro gains value. Second, Washington’s 10 % baseline tariff plus sector-specific duties on steel, aluminium and automobiles have raised landed costs. With US importers unwilling to pay more, many Portuguese firms are swallowing the difference, eroding their profit margins. The Bank of Portugal notes that this policy of price absorption is more prevalent among businesses that entered the American market only in the last decade and are reluctant to lose shelf space.

Sector Hotspots: From Chemicals to Footwear

The pain is not evenly spread. Petro-chemicals, which represented almost 25 % of all US-bound goods in 2024, swung from double-digit growth to a 5.4 % drop last year and an even steeper tumble in early 2025. Mineral fuels suffered a dramatic 57 % collapse in January shipments. Machinery makers, long celebrated for their resilience, have seen a gentler but persistent decline. On the consumer side, footwear exports slumped 12.7 % in the first quarter, while wine producers trimmed bottle prices to keep volumes afloat, pushing the average value per litre down from €2.73 to €2.65. Paradoxically, the shoe sector also spies an opportunity: the 15 % duty on European shoes is lighter than the 34 % slapped on Chinese competitors, meaning agile Portuguese brands could still claw market share if they weather today’s storm.

Exchange Rate Swings and Price Rigidity

Currency volatility is adding a second layer of complexity. Because invoice prices rarely move until new catalogues are printed, a weaker dollar immediately translates into fewer euros on the exporter’s income statement. Over the past year, the euro has firmed on expectations that the European Central Bank will keep rates higher for longer, while the Federal Reserve pauses. Every cent of dollar depreciation forces Portuguese firms to choose between trimming costs, raising dollar prices—an almost impossible ask—or surrendering margin. Some larger groups hedge with non-deliverable forwards or FX options, but many family-owned outfits consider these tools too expensive or too complex.

Coping Tactics: From Hedging to Government Support

Lisbon is trying to stem the bleeding. The April launch of the “Programa Reforçar” unlocked €5.185 B in working-capital loans via the Banco Português de Fomento and set aside an extra €1.2 B in credit-insurance ceilings so exporters can chase new clients outside North America. A dedicated €3.5 B lending window, partly in grants, favours companies willing to re-tool for higher-value products. On the private side, corporate treasurers are negotiating euro-denominated contracts, spreading fixed costs across multiple markets and, when scale allows, signing long-term distribution deals that peg prices to a currency basket rather than a single unit.

What Comes Next for Transatlantic Trade

Much depends on the outcome of the next US electoral cycle and the trajectory of the euro. Analysts at the OECD warn that Portuguese exporters should plan for a scenario where today’s tariffs remain in place and even tighten in sectors such as textiles and automotive components. The revocation of the “De Minimis” duty-free threshold—once a backdoor for fast-fashion rivals—could ironically reward Portuguese brands known for sustainable craftsmanship. Yet whatever policy Washington adopts, the message is clear: competing in the United States now requires deeper pockets, sharper risk-management skills and a willingness to sacrifice short-term gains for long-term positioning. For Portugal’s export champions, the age of easy money in America is over; the next chapter will be written by those able to reinvent their playbook without losing the distinctive quality that first opened American doors.