Europe wakes up to Trump's new tariff reality
Some fear they will not survive at all.
The US will impose a 15% tariff on most European exports from today, part of a wider barrage of levies set to redraw global trade.
While down from even more elevated threatened rates, the tariffs are the highest since the 1930s.
"Companies are waking up to the fact that we're dealing with an historically higher tariff rate," said International Chamber of Commerce Deputy Secretary General Andrew Wilson.
"It's difficult to see that moving unless there are catastrophic consequences of the US economy," he said.
He added the chamber was seeing shipment delays and companies reassessing supply chain strategies. Trading with the United States was now "hellishly more difficult."
"The complexity of doing business with the US has gone to levels nobody could have imagined," he said.
'Tarrifs hurt the Americans, they hurt us'
In Germany's Moselle Valley, winemaker Johannes Selbach said tariffs were damaging for the industry on both sides of the Atlantic.
They had been hoping for zero-for-zero tariffs, but face 15% for now, with sector specific talks ongoing.
"The tariffs hurt the Americans and they hurt us," Selbach said in a warehouse surrounded by crates of wine with "USA" written on them in black letters.
"Thousands of families who produce wine in Europe and thousands of families in the importing, wholesaling, retailing, restaurant business in the US are dependent on the flow from both sides," he said, adding jobs and profits would be hit.
Different sectors face varying degrees of pain. Higher-end luxury brands have more pricing power to adapt to the tariffs. Big companies can swallow some margin loss or shift some production into the United States, though often not all of it.
Even big consumer firms like Procter & Gamble have flagged US price hikes to deal with the tariff impact. Adidas said it could increase prices.
Reuters' global tariff tracker shows at least 99 out of nearly 300 companies monitored have announced price hikes in response to the trade war, most from Europe.
Mr Trump has said the tariffs are a response to persistent US trade imbalances and declining US manufacturing power, and that the moves will bring jobs and investment to the nation.
'We cannot relocate champagne vines'
Diverging US tariffs globally remain a challenge, however, with big manufacturing centers like Mexico, Canada, India and Vietnam having higher rates than others like South Korea or Europe.
Smaller players often can't make quick changes to production and supply chains.
Hugo Drappier, a champagne maker who runs his own firm Champagne Drappier, pointed out that the bubbly beverage could only be produced in a particular region of France.
"It's an industry that employs a lot of workers who can't be relocated, precisely because the work is done here. We don't have the option of relocating champagne vines elsewhere in the world," he said.
He said some orders had been held up due to tariff uncertainty, though he retained hopes that trade talks were becoming more positive, with the 15% rate better than previous threats of 30%.
Laurent Cohen, CEO of family-owned perfumery Corania, based in a northern suburb of French city Marseille, is scouring for new markets and ways to maintain business in the United States, which accounts for a quarter of sales.
That may mean a hit to margins and higher US prices, he said.
"I praise the fact that we are no longer in a state of uncertainty," he said, referring to the US trade deal.
"But with 15% customs duty on our products - which are affordable perfume products - we will now have to show immense ingenuity to keep on going in the US market."
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RTÉ News
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RTÉ News
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13 hours ago
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I have enough grey hairs to remember trade deals being done in the past, notably the massive Uruguay round of talks which concluded in 1994 and was – though we didn't know it at the time – the high point of a long postwar drive to free world trade and reduce tariffs. The media spent many hours outside meeting rooms as negotiators from more than 120 countries went through complex line-by-line negotiations to cut tariffs and trade barriers. For Ireland, it was always a case of trading off the potential gains for industry with the threat to farmers. But over time, the State was a huge winner. The world had already started to move away from the relentless globalisation drive which had lasted well into this century. And now we have Trump's new world order and trade 'deals' which are a mix of reality, spin and fudge. We still do not know the full details of the deal between the United States and the European Union – before we even start to worry about how Trump might try to rewrite it. 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We can assess the potential damage for Ireland only when we know the full details. The spirits and whiskey sectors look exposed, for example, as the US says it is a target for the 15 per cent tariffs. As this is a big issue in France, there will be an EU push in the week ahead, before final details of the deal with the US are published, to try to lower the burden here. As well as the impact on Ireland, this is one to watch at political level in the EU, as France puts pressure on Ursula von der Leyen 's European Commission , which negotiates on behalf of the EU. As butter, another vital Irish export, was already subject to a tariff of about 16-17 per cent (which will remain), things will at least not get any worse here. If we want to identify problem areas, smaller companies reliant on the US in a range of sectors is one. Small may no longer be beautiful in a complex and politically-driven world market. And it is also worth focusing on the risks to parts of rural Ireland – as highlighted by Chambers Ireland chief executive Ian Talbot – particularly those reliant on sectors such as food and also pharma and medical products. Towns such as Westport and Kinsale will anxiously await details on the pharma tariffs. [ EU-US trade deal analysis: Tariffs have a price for both sides. Trump was willing to pay it Opens in new window ] And here things remain a bit woolly, largely because the US president is undertaking study of this sector under a so-called section 232 process – referring to a section of a 1960s US act. This is separate from the big so-called reciprocal tariffs announced on Friday. The EU view is that its deal caps tariffs on pharma at 15 per cent – including any outcome from this separate process. If this holds, the sector at least knows its maximum charge. 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But this is likely to mean somewhat lower investment by pharma here in the years ahead and a sector which may be more focused on EU and other markets rather than exporting back to the US. Changes in the pricing and accounting practices of the multinationals – now designed to report massive profits in low-tax Ireland – are also likely to cut corporate tax revenue here. Like the rest of the economy, the Irish pharma sector will adjust. But there will be a cost, the scale of which depends on the extent of US policy action. The longer-term strategic questions will take time to clarify themselves. A major issue is whether Trump's policy direction will stick. If you are, say, a big pharma company, do you base your investments on an expectation that this is now the new world, or that Trump's policies will, in time, be rolled back either by him or by his successor? US court challenges to his powers to impose wide-scale tariffs are only now playing out. US consumer prices are surely set to rise – the only question is how much and whether there will be a cost in jobs. And the financial market calm could be upset at any time, given the crazy and risky course on which Trump has embarked. On Friday, they were already looking jumpy. So the uncertainty will roll on. Ireland should get through the first wave of this, albeit with some collateral damage. But the big question is our place in a world which seems to be breaking up into new trading blocs and alliances. And whether the valuable certainty which a final, agreed trade deal might bring can last - Ireland and Europe now needs Trump to direct his attention elsewhere.
