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US Tariffs Loom: A Growing Threat To European Industries

The announcement of potential US tariffs on European goods by President Donald Trump has raised concerns across various sectors.

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US Tariffs Loom: A Growing Threat To European Industries

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The announcement of potential US tariffs on European goods by President Donald Trump has raised concerns across various sectors. With the automotive, chemical, and food industries being particularly exposed, the European market faces significant challenges.

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From Tuesday, the United States will impose a 25% tariff on Canadian goods and an additional 10% on Chinese imports. Trump has hinted that the European Union could be the next target.

Impact on the European Automotive Sector

The European car industry is highly vulnerable, with Germany being the most exposed. The US is Germany’s largest export market for vehicles after China.

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  • Shares in German Carmakers: Volkswagen saw a 4.2% drop, while Mercedes and BMW shares declined by 2.9% and 2.3%, respectively.
  • Stellantis Impact: Shares in Stellantis, which owns Fiat, Peugeot, and Jeep, fell by 4.1% due to its factories in Canada and Mexico.

Chemical and Pharmaceutical Sectors at Risk

Germany, home to chemical giants Bayer and BASF, is heavily reliant on the US market.

  • Pharmaceutical Exports: Belgium, Denmark, and Ireland also face exposure, with France exporting over 17% of its pharmaceuticals to the US.

The European food industry, particularly the wine and olive oil sectors, has bitter memories of tariffs during Trump’s first term.

  • French Wine Industry: The US is France’s top market for wine exports.
  • Spanish Olive Oil: Exports have plunged by 70% since 2019 due to previous tariffs.

Energy and Steel Industries

While Trump supports the oil and gas sectors, the outlook for renewables is bleak.

  • Renewables Sector: Experts predict a drop in US demand, pushing China to focus on the European market, increasing competition.
  • Steel Exports: With a quarter of European steel exports going to the US, tariffs would harm a sector already struggling.

Shares in ArcelorMittal and Thyssenkrupp fell by 2.3% and 5.9%, respectively.

The potential US tariffs pose a significant threat to European industries. Sectors ranging from automotive to pharmaceuticals and food exports may face severe consequences, with market players bracing for a possible trade war.

Read More : Donald Trump Hints At Prospective Deal To Resolve UK Tariff Dispute

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