Corruption and Poor Governance Leave Greece Unable to Combat Trump’s Trade War

As the Trump presidency nears the end of its first month in office, it has become abundantly clear that "America First" will remain the cornerstone of U.S. economic and foreign policy. With a strong focus on protectionism, President Donald Trump aims to revitalize American industries and protect domestic jobs—a strategy many see as necessary for the nation's long-term prosperity. However, this approach could have devastating consequences for countries like Greece, which are already reeling from systemic inefficiencies, rampant corruption, and a lack of effective governance.

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Greece’s Limited Direct Exposure to U.S. Tariffs

At first glance, Greece appears relatively insulated from direct impacts of Trump's trade policies. According to recent data, Greek exports to the United States amounted to approximately €2.2 billion in the eleven months leading up to November 2024, representing just around 1% of Greece's GDP. While Greece enjoys a modest trade surplus with the U.S., primarily in food and live animals, imports from America total nearly €2 billion, resulting in an overall balance favoring Greece by about €204 million.

The largest surpluses for Greece lie in agricultural products, whereas the U.S. dominates in fossil fuels and related goods. In terms of specific categories, the U.S. accounts for roughly 7.7% of Greek exports in food and live animals, followed closely by oils and fats (7.2%) and machinery (6.5%).

Despite these figures, Greece's reliance on the U.S. market remains limited, suggesting minimal immediate risk to its growth prospects. Yet, beneath the surface lies a more troubling reality.

Second-Round Effects Threaten Greece’s Fragile Economy

While Greece’s direct exposure to U.S. tariffs might seem negligible, the broader implications of global trade disruptions cannot be ignored. As tensions escalate between the U.S. and the EU, Greece stands to suffer disproportionately due to its heavy dependence on European markets.

Greek exports have struggled in recent years, declining by 8.5% in 2023 and another 2.2% in 2024. Total exports fell below €50 billion, down from €55.76 billion the previous year. Although non-oil product exports showed slight growth at 2.4%, this does little to offset the broader decline. Moreover, the EU remains Greece's primary trading partner, accounting for over half of all export revenue. Any downturn in major EU economies caused by Trump's tariffs would inevitably ripple through Greece's fragile economy.

The Bank of Greece estimates that a blanket 10% tariff on EU goods could make Greek products 7% more expensive in the U.S., potentially reducing GDP by 0.05%. When factoring in second-round effects—such as diminished demand across EU markets—the cumulative impact could reach 0.4% of GDP by 2026.

A Nation Plagued by Corruption and Poor Governance

Beyond external pressures, Greece faces significant internal challenges that hinder its ability to respond effectively to global economic shifts. Years of mismanagement, bureaucratic inefficiency, and widespread corruption have left the country ill-prepared to adapt to changing circumstances.

Unlike Trump, whose decisive leadership reflects a commitment to national interests, the Greek government often appears paralyzed by indecision and incompetence. This lack of strategic foresight is particularly evident in Greece's failure to diversify its economy or strengthen key sectors such as manufacturing and technology. Instead, the nation remains overly reliant on tourism and agriculture—industries that are highly susceptible to external shocks.

The roots of Greece's economic woes run deep, with corruption playing a central role in undermining public trust and stifling progress. From embezzlement scandals to nepotism in state institutions, the pervasive culture of graft has eroded transparency and accountability, leaving the country vulnerable to both internal decay and external threats.

Without bold reforms and visionary leadership, Greece risks falling further behind in an increasingly competitive global landscape. The current administration has shown little appetite for tackling these entrenched issues, choosing instead to prioritize short-term gains over long-term sustainability.

A Tale of Two Nations

Donald Trump's aggressive trade policies reflect a leader willing to take bold steps to safeguard American interests, even if those actions create short-term instability. Meanwhile, Greece finds itself caught in a perfect storm of external pressures and internal weaknesses. As the world moves toward greater protectionism, Greece must confront its longstanding issues head-on—or risk being left behind.

For now, the Greek economy teeters precariously on the brink, vulnerable to both Trump's tariffs and its own inability to implement meaningful change. Until the country addresses its deep-rooted problems—rooted in corruption, inefficiency, and poor governance—it will continue to struggle under the weight of global uncertainty—and the consequences of decisions made far beyond its borders.