LA VALLETTA (MALTA) (ITALPRESS/MNA) – Malta’s trade deficit has narrowed slightly in the first two months of 2025, according to newly released figures from the National Statistics Office (NSO), but mounting pressures from U.S. trade policy are casting long shadows over the island nation’s economic outlook.
Provisional data shows that Malta’s trade deficit stood at €486 million between January and February 2025, down from €502 million during the same period last year. This modest improvement came amid a sharp slowdown in both imports and exports, which fell by 10% and 14% respectively.
The figures reveal a stark transformation in Malta’s trading landscape, with the U.S.–Malta trade corridor bearing the brunt of global economic tensions. Exports to the United States collapsed to just €11.9 million in February 2025, down from €138.5 million a year earlier — a staggering 91% plunge. The dramatic fall has reversed what was once a substantial surplus into a €15.7 million trade deficit.
The reversal is widely attributed to U.S. President Donald Trump’s newly imposed 20% blanket tariff on imports from the European Union, which includes Malta. The move, part of a sweeping protectionist policy also targeting China with tariffs of up to 104%, has stoked fears of a full-blown global trade war.
Given that the EU remains Malta’s primary trading partner — accounting for 55% of imports and 34.2% of exports — the implications of these tariffs are significant. Key export sectors are already showing strain, with pharmaceutical exports down 11% and electrical machinery slipping 2%.
Despite the broader headwinds, the data points to some surprising new growth markets. Exports to Turkey skyrocketed to €26.7 million in February 2025, up from just €1.8 million the previous year — a nearly 1,400% increase. Similarly, exports to the Philippines jumped from €0.3 million to €8.6 million.
Germany emerged as Malta’s only major trade partner with a positive trade balance in early 2025, generating a €50 million surplus largely driven by robust exports of pharmaceuticals and machinery. Meanwhile, Malta’s trade deficit with Italy was halved, falling to €62 million as imports from the country dropped significantly from €159 million to €72 million.
In terms of sectors, mineral fuels remained Malta’s largest import category at €345 million over the two-month period, though February’s figure marked a 33% decline year-on-year. Pharmaceuticals showed some resilience, with imports rising 4%, but exports in the same category slumped 11%.
One of the most striking sectoral shifts came in the precious metals and stones category, where exports soared over 5,000% to €25.3 million — suggesting a potential pivot towards high-value, low-volume goods that are less vulnerable to tariff pressures. Similarly, imports of organic chemicals surged by 527%, reaching €25.1 million in February.
However, not all sectors fared well. Machinery and transport equipment exports were particularly hard hit, plunging by €161.3 million in the first two months of the year. Exports of vehicle parts alone dropped 24% to €22.7 million, mirroring wider global supply chain realignments.
For February alone, Malta registered a trade deficit of €183.5 million, down from €198.3 million a year earlier. Imports stood at €534.6 million, while exports totalled €351.1 million — both representing substantial year-on-year declines.
As global trade dynamics continue to shift rapidly, Maltese policymakers face growing pressure to diversify export markets and cushion the economy against external shocks — particularly as tensions with major partners like the U.S. show no signs of easing.
– photo IPA Agency –
(ITALPRESS).
