Update of March 12, 2025
This Wednesday, March 12, the American president made good on his commitment to apply new 25% tariffs on all steel and aluminum imports, without any exemptions for its trading partners.
The European Union responded immediately: the European Commission unveiled this Wednesday morning the introduction of “firm but measured” tariffs on a range of American products starting April 1. These measures will affect American goods worth up to €26 billion. This concerns industrial products, food and agricultural products, textiles and clothing.
“The retaliatory measures we are adopting today are firm but proportionate. Faced with US customs duties worth $28 billion, we are responding with countermeasures equivalent to €26 billion,” explained Ursula von der Leyen, President of the Commission.
Article published on March 4, 2025
Donald Trump had promised to impose 25% customs duties on European, Mexican, and Canadian products if he returned to power. This announcement, which looked like a political pressure move, reflected a very real economic situation: the United States is the second largest importer for the European Union, which has a trade surplus of €157 billion with Uncle Sam. We sell more than we buy. Even if the current market remains largely favorable to the United States, the implementation of Trump's threats could therefore change a lot of things in the daily lives of Europeans. A transatlantic trade war could radically transform our consumption habits, with the explosion of tariffs on certain products.
Energy on the front line
The first sector to be impacted by this trade war would be energy. Since Russia's invasion of Ukraine, the European Union has reduced its imports of Russian natural gas, with the goal of completely ending them by 2027. This strategic decision has created a major opportunity for American exporters of liquefied natural gas. Trump has not failed to emphasize this dependence, urging the EU to buy more gas, or face higher taxes. An increase in customs duties on energy imports would directly translate into higher gas and electricity bills for European households. Motorists would not be spared either, with a likely increase in the price of gasoline and diesel.
Medicines and health products
The pharmaceutical sector represents one of the pillars of American exports to Europe. Many treatments, drugs, and medical devices come from laboratories and companies based in the United States. An increase in customs tariffs would directly affect the accessibility of these essential products. Concretely, patients and healthcare professionals could bear the brunt of the price increase, which would force Europe to develop its own pharmaceutical production chain. However, this transition would require considerable investment and several years of development, not to mention the environmental challenges linked to large-scale chemical production on European soil.
Food products soon to be inaccessible?
American soybeans, the main feed for European livestock, would be directly affected by these tariff increases. This increase would have repercussions on the price of meat and dairy products. Wheat imported from the United States would suffer the same fate, leading to higher prices for bread, cereals, and many baked goods.
For fans of American products, the situation could be even more painful. Peanut butter, almond milk, and other nut-based products would see their prices skyrocket. Sodas, led by Coca-Cola, would not escape inflation, as would candy bars and American bourbon whiskey.
Electronics too
The United States dominates the global microprocessor market thanks to Intel, AMD, and Qualcomm. Their electronic chips power the vast majority of personal computers and smartphones available on the European market. Logically, an increase in EU customs duties on these essential components would lead to an increase in production costs, and therefore in final products. The same goes for smartphones equipped with Qualcomm Snapdragon processors.
The automotive sector would be particularly affected
The automotive sector has long been the focus of trade tensions between Europe and the United States. While European cars exported to America would be the first victims of Trump's tariffs, European consumers would not be spared. Many essential components of modern vehicles—sensors, electronic chips, and onboard systems—come from the United States. An increase in tariffs on these parts would affect not only the price of new cars, but also the cost of repairs. Beyond trade tensions, the implementation of American threats could have a lasting impact on political relations between Europe and the United States. This is probably why few experts truly believe in the full implementation of these tariff measures. However, if these tariffs were to be applied, the 27 Member States have already indicated their intention to retaliate with similar measures.
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