Mainland Portugal, along with the autonomous island regions of the Azores and Madeira, offers American exporters a market of approximately 10.7 million people in a country roughly the size of the State of Indiana. As a member of the European Union (EU) and the eurozone, Portugal is fully integrated within the EU, uses the euro as its currency, and follows most directives from the European Commission (EC) in Brussels. As with all EU countries, Portugal’s borders and ports are open to the free flow of trade with other EU member countries. Portugal has strong democratic institutions, a robust media environment, a vibrant civil society, and well-established trade unions. However, Portugal’s policy towards procurement and foreign business and investment lacks screening for national security criteria.
In addition, the lack of structural reforms since 2011 has led to a severe shortage of affordable housing and discontent among young professionals seeking opportunities in other countries, especially in neighboring EU countries. The government is focused on tourism, renewable energy, digitalization, advanced manufacturing, technology and service delivery, and value-added agricultural products.
Many Portuguese companies, including some in critical infrastructure, have significant ownership by state-owned enterprises based in the People’s Republic of China (PRC). Portugal passed an investment screening law in 2013; however, its practical implementation has been challenging. As a result, the Portuguese economy, including the public sector, operates under significant Chinese Communist Party (CCP) economic influence, affecting its selection of vendors in sectors ranging from port scanning equipment to electric battery production. The U.S. government and the EU have been raising awareness about the risks of using untrusted 5G vendors in telecom networks. In May 2023, Portugal effectively outlawed equipment from Chinese suppliers of 5G.
Similar concerns exist in other sectors, such as genomics, artificial intelligence (AI), and cybersecurity. In November 2025, Portugal’s Parliament approved a cybersecurity law that transposes the EU’s NIS 2 Directive while introducing provisions to identify and exclude “high-risk suppliers” from critical infrastructure. The legislation enhances the government’s ability to exclude untrusted vendors from 5G and other ICT networks in these sectors, strengthens risk management and incident reporting requirements, and enhances supervisory powers.
According to the Bank of Portugal, Portugal’s economy grew 1.9% in 2024, significantly outperforming the Eurozone’s average growth rate of 0.8%. The economy is expected to grow by 2.2% in both 2025 and 2026 and by 1.7% in 2027, reflecting a steady convergence path with the euro area. The external sector (mainly exports and foreign investment), bolstered by recovering supply chains and increased tourism, has been a key driver of this growth.
The United States is Portugal’s largest non-EU trading partner and Portugal’s fourth-largest export market. According to the Portuguese National Statistics Institute (INE), Portugal’s total exports of goods in 2024 were valued at €79.22 billion ($85.55 billion), and imports of goods were €107.50 billion ($116.10 billion). Portugal’s top export partners were: Spain (27%), France (13%), Germany (13%), and the United States (6.9%). Portugal’s top import partners were: Spain (33%), Germany (11%), France (7.3%), the Netherlands (5.6%), and Italy (5.2%).
The total amount of U.S. goods sold into Portugal is likely higher than the statistics reflect, as census data does not account for U.S. products imported into other EU countries and subsequently transported into Portugal for resale. It is common throughout the European Union for goods to be shipped to one EU location, taking advantage of lower value-added tax rates and then distributed by ground transport to neighboring member state markets.
According to the U.S. Bureau of Economic Analysis (BEA), in 2024, U.S. exports of goods and services to Portugal totaled $4.9 billion, representing an 18.1% increase from 2023, while imports from Portugal reached $11.3 billion, a 17.2% rise from 2023. As a result, the trade deficit with Portugal increased to $6.4 billion.
The top five U.S.-exported products to Portugal in 2024, according to TradeStats, were oil and gas ($1.25 billion), transportation equipment ($477 million), agricultural products ($309 million), chemicals ($220 million), and computer & electronic products ($148 million).
The top U.S. exports to Portugal originated from Texas ($1.22 billion), Louisiana ($248 million), Indiana ($179 million), Illinois ($173 million), and Florida ($112 million).The top five U.S.-imported products from Portugal in 2024 were chemicals and pharmaceuticals ($1.9 billion), petroleum and coal products ($1.1 billion), plastics and rubber products ($457 million), apparel and accessories ($417 million), and computer and electronic products ($346 million). The top U.S. regions imported from Portugal were New Jersey ($1.59 billion), Puerto Rico ($927 million), California ($544 million), Ohio ($397 million), and New York ($359 million).
Portugal has an ambitious vision to modernize its infrastructure. Three landmark projects collectively represent over €15 billion in investment. The government aims to build the Luís de Camões International Airport in Alcochete, slated to open by 2034, with a total estimated cost of €6.6-€9 billion ($7.12-$9.72 billion). The new airport aims to ease the current Lisbon airport’s severe congestion, accommodate up to 100 million passengers annually, and unlock substantial opportunities in logistics, commercial real estate, and passenger and air cargo services. The second project is the Lisbon–Porto high-speed rail line, a €3 billion ($3.24 billion) endeavor funded in part by €875 million ($945 million) from the European Investment Bank. This new rail system will slash travel times to just 75 minutes, catalyze business travel between Portugal’s two largest cities, and reinforce sustainable mobility across the country.
The government has confirmed the third Tagus River crossing project, which includes a new bridge connecting Chelas in Lisbon with Barreiro on the south bank, with an estimated investment of €3 billion ($3.24 billion). Furthermore, as part of a broader urban transformation strategy, the Parque Cidades do Tejo project seeks to revitalize underdeveloped areas and promote metropolitan integration. This trio of mega-projects presents a once-in-a-generation opportunity to participate in Portugal’s transportation and infrastructure development, residential expansion, and clean energy innovation. However, the timeframe for their realization remains uncertain, as large-scale initiatives often face delays. Projects such as the new Lisbon airport have been under discussion and awaiting approval for decades, highlighting the long-standing challenges of translating vision into execution.
Portugal’s renewable energy market is noteworthy. According to the Portuguese Renewable Energy Association (APREN), in 2024, Portugal ranked fourth in Europe, with the highest share of renewable energy in electricity generation at 80.4%, behind Norway, Denmark, and Austria. With virtually no indigenous fossil fuel production, Portugal views renewables as an imperative for achieving energy security. Portugal reportedly also has the eighth-largest reserves of lithium in the world and the second-largest in Europe. The more significant opportunity may be in lithium conversion/refining and further up the battery value chain. There is also a need for energy transition equipment and solutions, including electrolyzers, solar panels, turbines, port upgrades, grid equipment, and cables connecting offshore wind to the onshore electric grid.
Portugal continues to stand out on the global investment stage. According to the Greenfield Foreign Direct Investment Performance Index 2025 by fDi Intelligence, Portugal is now the second-best performer in Western Europe and ranks 16th globally, punching above its economic weight in attracting new investment projects. The report highlights a 4.5% increase in foreign direct investment, with 186 additional projects compared to 2024. This upward shift testifies to Portugal’s growing appeal among international investors. According to a PitchBook study, Portuguese companies have raised $647 million in venture capital in the first half of 2025, already surpassing the total raised in 2024. American funds accounted for 78.5% of the total investment made in Portuguese companies, totaling $508 million, the highest share recorded in the past ten years. These figures highlight the strength of transatlantic economic relations and the strategic role of the U.S. in Portugal’s innovation and technology ecosystem.
Integrated into the Next Generation EU, the Portuguese government’s portion of the EU’s Recovery and Resilience Plan (RRP) will reach €17 billion ($18.36 billion), with €14 billion ($15.12 billion) in subsidies and €3 billion ($3.24 billion) in loans, to be fully implemented through 2026. The RRP is divided into three main pillars: Resilience, Climate, and Technological Transition, each with assigned budgets and reform objectives. The Resilience pillar focuses on expanding and digitalizing the healthcare system, affordable housing, and providing training incentives for the Portuguese talent pool. The Climate Transition pillar supports sustainable mobility and the decarbonization of industry. The Digital Transition pillar aims to invest not only in companies and their digital transformation but also in the capacity-building, digitalization, and interoperability of public administration.
Portugal’s Public Finance Council (CFP) stated in its “Economic and Fiscal Outlook 2025-2029” report that a promising path toward steady and sustainable growth is in sight, with its economy projected to expand by 2.2% in 2025, primarily driven by a surge in public investment supported by the Recovery and Resilience Plan. This momentum lays a solid foundation for the private sector to thrive, especially as financing conditions become more favorable and investor confidence builds. Inflation is moderating, and the labor market remains strong, offering a stable environment for consumers and businesses alike.
On the fiscal front, CFP projects a balanced budget for Portugal in 2025 and anticipates that the public debt ratio will steadily decline through 2029. The public debt ratio is set to fall to 85.4% of GDP by 2029, reflecting a disciplined and sustainable fiscal path.
The United States continues to work closely with Portugal to expand and deepen two-way trade and investment, thereby augmenting the already historically strong political, geostrategic, and security ties between the two countries. Portugal’s continued drive to modernize and diversify its economy will create opportunities for U.S. trade and investment over the medium and long term. Demand for high-quality, price-competitive U.S. products in Portugal is strong.
Political Environment
Visit the State Department’s website for background on the country’s political and economic environment.