The recent trade agreement between the United States and the European Union, known as the “Turnberry Accord,” marks a new era of trade protectionism. The imposition of 15% tariffs on over two-thirds of European exports to the U.S. has sparked concerns over the competitiveness of Europe’s economy, with ripple effects reaching as far as Cyprus.

As Brief reports, although Cyprus is not a direct target of these new tariffs, it is not immune. Its heavy reliance on the European economy and deep integration with global markets means that even indirect effects can translate into significant economic pressure. Domestic consumption, food exports, and tourism all play a cumulative role, and the worsening international economic climate could amplify these challenges.

Impact on Recognizable Cypriot Products

The 15% tariff on goods such as halloumi and Cypriot wine—two of the island’s most recognizable export products—is expected to raise their cost in the U.S. market. This will make them less competitive, reducing demand and complicating efforts to both maintain existing customers and secure new trade agreements.

Additionally, the strengthening of the U.S. dollar against the euro makes Cypriot products more expensive for American consumers.

Businesses that transact in dollars face higher costs, which negatively impact liquidity and profit margins. Managing this foreign exchange risk is critical for the stability and growth of Cyprus’ export sector.

Tourism and Broader Economic Effects

The uncertainty stemming from the agreement also affects Cyprus’ tourism sector. Major source markets such as Germany, France, and Italy are facing economic slowdowns and reduced purchasing power, potentially dampening travel demand.

On a global scale, the trade confrontation is fueling market volatility and affecting currency exchange rates. The euro faces downward pressure against the U.S. dollar, which increases operational costs for Cypriot companies relying on dollar-based transactions or financing.

The new tariffs target strategic industries such as automotive, pharmaceuticals, and semiconductors, while aerospace, some agricultural products, and raw materials remain exempt. Certain metals, including aluminum and copper, still carry tariffs of up to 50%.

Cyprus Exports to the U.S.

According to the Cyprus Statistical Service, Cypriot exports to the U.S. reached €26.8 million in 2023, led by:

• Halloumi: €11 million

• Electrical machinery: €6.1 million

• Cocoa preparations: €1.7 million

In 2024, exports fell to €23.6 million, a 12% decline. The downward trend continues in 2025, with €10.2 million in exports in the first half of the year, raising doubts that total annual exports will remain above €20 million.