Introduction
The trade relationship between the United States and the European Union (EU) accounts for 30% of global trade, with €1.68 billion in goods and services exchanged annually by 2024, according to the European Commission.
Key Sectors Affected
Several European sectors, crucial to their economy, face significant challenges due to the 30% tariffs announced by US President Donald Trump on Saturday, set to take effect on August 1.
Pharmaceuticals
European pharmaceutical products are among the top exports to the US, accounting for 22.5% of total exports in 2024, as per Eurostat.
Several pharmaceutical companies have already announced investments in the US to bolster production while urging the EU to relax its regulatory framework.
Automobiles
The US is a vital market for the European automobile industry, which exported nearly 750,000 vehicles worth €38.5 billion in 2024, according to the European Automobile Manufacturers Association (ACEA).
Germany, a significant contributor to these exports, manufactures high-end sedans, SUVs, and sports cars for brands like Audi, Porsche, BMW, and Mercedes.
In 2024, the US accounted for 23% of Mercedes’ revenue. The company also produces SUVs in the US for export to other countries, which could be affected by European retaliatory measures.
Aerospace
The aerospace sector, highly globalized, is already heavily impacted by current US tariffs.
Since March 12, a 25% surcharge has been applied to aluminum and steel imports into the US, essential materials for the aerospace industry.
Moreover, all products (including aircraft) imported from Europe face an additional 10% tariff.
The agreement being negotiated between the EU and the US this week, before Trump’s announcement on Saturday, was intended to include exemptions for the aerospace, alcoholic beverages, and cosmetics sectors.
Luxury Goods
The luxury sector has remained relatively quiet in recent months regarding its response, but the impact of tariffs could be substantial.
LVMH, the world’s leading luxury group, generates a quarter of its sales in the US (and 34% of its wine and spirits sales). Its CEO, Bernard Arnault, urged European leaders to resolve trade tensions amicably and expressed support for a free trade zone with the US.
LVMH already has three Louis Vuitton workshops and four Tiffany stores in the US.
Hermès, known for its Birkin bags and silk scarves, had previously stated it would fully offset the initial 10% tariffs imposed by Trump in April by raising US sales prices. However, 30% tariffs present a different scenario.
Cosmetics
French and Italian luxury perfumes and cosmetics sell well in the US.
In 2024, L’Oréal generated 38% of its annual revenue in the US. The company locally produces less than half of the products it markets there, primarily high-end items (Lancôme, Yves Saint Laurent, Armani…).
L’Oréal’s CEO mentioned the possibility of relocating “a portion” of production to the US earlier this year.
Gastronomy and Wines
The Italian farmers’ union, Coldiretti, called the 30% tariffs a “death blow” to “Made in Italy” products, fearing an impact on consumer prices.
Coldiretti projects that with 30% tariffs, additional taxes on certain iconic “Made in Italy” products would reach 45% for cheeses, 35% for wines, 42% for processed tomatoes, 36% for stuffed pasta, and 42% for jams and preserves.
For France, the US is the primary international market for wines and spirits, generating €3.8 billion in 2024, according to its federation (FEVS).
“It would be a catastrophe for the entire sector, at a time when wines and spirits already face immense challenges,” said Jérôme Despey, director of viticulture at FNSEA, on Saturday.
“We have often seen threats from the US; we ask the European Commission not to concede in negotiations,” Despey told AFP.
