E.U. Entrepreneurs Weigh The Impact Of 'The Biggest Ever' Trade Deal

Forbes

4 days ago

So, there we have it. A deal has been agreed. The threat of 30% tariffs on goods exported to the U.S. from the European Union has been removed. Stability has been restored. Time, perhaps, for a collective sign of relief.
But then again, maybe not. While President Trump has enthusiastically described the U.S.-E.U. trade agreement as the 'biggest deal ever,' the response in Europe has been mixed. Posting on X, France's Prime Minister Francois Bayrou said the deal represented an act of submission and a dark day for Europe. In some quarters there is feeling that in trying to restore a degree of stability to transatlantic trading relations, the European Commission has capitulated. Under the terms of the agreement, most European exports to the U.S. will face tariffs of 15%. In contrast, the import taxes imposed by Europe on goods travelling in the other direction will mostly remain below 2.0%. In other words, it appears to be a somewhat one-sided arrangement.
So how will Europe's entrepreneurs and SME exporters navigate this new reality? From a glass-half-full perspective, it could have been worse. A 15% tariff rate may be bad, but it's considerably better than the 30% figure that could have become a reality on August 1 had the two sides not managed to reach an agreement.
But it's hard to ignore the fact that until Donald Trump returned to the White House and announced plans for 'liberation day' the average U.S. tariff on European goods was 1.47%. As Aurélien Colson, Academic Co-Director of the ESSEC Business School's Institute for Geopolitics and Business, notes, a rise to 15% will be a bitter and difficult pill for small businesses to swallow.
Reduced Competitiveness
'Small European exporters will definitely be impacted,' he says. 'For small exporters with tight margins, this major cost increase will need either to be absorbed - cutting profits - or passed on to U.S. buyers, risking lost competitiveness.'
So what does this look like at the entrepreneurial coal face? In reply to an emailed question, Giuseppe Gallo, CEO and founder of drinks brands Italicus Rosolio di Bergamotto and Savoia Vino Aperitivo, says the deal could prove costly to his business.
'Over 40% of our international exports are destined for the US, so the ongoing threat—and now implementation—of tariffs has had a significant impact. While the revised 15% rate is a slight improvement from the 20% initially proposed in April 2025, it still forces us to absorb costs and compromise on overall margins in the short and medium term,' he says.
As Gallo sees it, the deal overly favors the U.S. and despite introducging some certainty to E.U./U.S. trading relations, he doesn't welcome the deal. ' I believe that fair and open competition is essential for consumers to access high-quality products at fair value. Protectionist policies ultimately damage competitiveness, restrict consumer choice, and undermine innovation across the industry,' he says.
Not every business will be directly affected. For instance, digital products aren't subject to tariffs. Juan Graña is co-founder and CEO of Neurologyca, an AI platform that analyses human emotional intelligence. He sees much to welcome in the deal.
'As a European company expanding into the US, we do see the deal as a welcome source of clarity. It may favour the US in certain areas, particularly around physical goods, but for fast-growing technology companies like ours, predictability often matters more than perfect symmetry,' he says.
Nevertheless, he wonders whether Europe is currently in a position to play a key role in shaping the rules of trade and technology, rather than simply adapting to regulations set somewhere else. 'In areas like digital regulation and AI governance, that distinction will become increasingly important in the coming years," he says. 'And any perception that Europe is bowing to external pressure risks weakening its influence in setting future frameworks.'
However, he is also concerned that Europe may seek to defend its autonomy through mechanisms such as the Anti-Coercion Instrument, legislation aimed at preventing undue foreign influence. 'While this gives the impression of helping EU tech firms by limiting US competition, in practice it may hamper innovation, amplify regulatory friction, and penalize firms that depend on integrated digital ecosystems across both sides of the Atlantic,' Graña adds.
Small Businesses Particularly Exposed
The new tariff regime will hit businesses of all sizes, but according to John Wegman - CEO of Netherlands-headquartered customs clearance and trade solutions provider, Customs Support Group, small companies are likely to be disproportionately affected.
'While larger corporations may have the flexibility to adapt their supply chains or pricing strategies to absorb or offset these costs, small and medium-sized enterprises (SMEs) will face far more difficult choices,' he says. 'For many SMEs, this development may trigger a strategic reassessment of their export markets, including whether to continue operations in the US or redirect efforts toward alternative, more accessible regions and benefit from the existing free trade agreements.'
Some sectors are likely to be harder hit than others.'Key sectors such as automotive, machinery and food are particularly exposed, with higher tariffs likely translating into increased consumer prices and potential erosion of their US market share,' adds Wegman.
Others, however, should be able to navigate the higher import taxes, and that won't necessarily be good for U.S. customers. 'European products with substitutes elsewhere will suffer, while European specialities – like mechanical spare parts, premium products and niche luxury goods wanted by US consumers will primarily boost inflation in the U.S,' says Aurélien Colson
The Benefits Of Stability
From a European perspective, the deal is far from perfect. So does the stability on offer outweigh the lopsided tariff arrangement? From the perspective of Customs Support Group, more certainty will allow companies to plan.
'The majority of our customers across Europe were taking the 'wait-and-see approach,' so the deal introduces a level of predictability that many European businesses have been seeking,' says Wegman. 'While some sectors may feel the terms are uneven, the broader benefit lies in reducing uncertainty and enabling companies to finally make strategic decisions and plan with more confidence.'
But maybe the uncertainty is not quite over yet. As Colson points out, what we're currently seeing is an outline of the agreement. There is more wrangling yet to do before it is signed and ratified. 'The agreement announced in Scotland remains very fuzzy,' he says. "There is no joint written agreement that has yet been released – and the final deal will need to be ratified on both sides of the Atlantic."
There could be further turbulence ahead.