Paris (AFP) – US President Donald Trump announced on Sunday that the United States was imposing 15-percent tariffs on all European Union countries. These countries are not all equally exposed to the US market and so will not suffer the same consequences when the duties kick in on August 1. In terms of value, Germany is by far the biggest exporter of goods to the US, which is a major outlet for its cars, steel, and machine tools. These goods exports totalled $161.2 billion in 2024. Next in line are Ireland and Italy, whose exports last year were worth $72 billion and $64 billion respectively, according to EU statistics office Eurostat. France is less exposed, even if it does have aeronautics, agri-food, wine, and luxury goods heavyweights that risk losing markets. According to Eurostat, the EU as a whole exports 20 percent of its goods to the United States. The 27-member bloc has an annual trade surplus with the United States of $235.6 billion, according to the Bureau of Economic Analysis (BEA), which reports to the US Department of Commerce. Only China has a higher surplus.
– Ireland, Europe’s lab – Ireland has the largest surplus among EU members, at $86.7 billion in value terms, and exports more than a quarter of its goods to the US. That is largely due to the presence of major US pharmaceutical companies such as Pfizer, Eli Lilly, and Johnson & Johnson. They all set up in Ireland to benefit from a 15-percent corporate tax, more advantageous than the 21-percent tax to which they are subject in the United States. These companies can thus host their patents in Ireland and sell on the US market, where drug prices are traditionally higher than in the rest of the world. Trump said on Sunday the pharma sector would not get special treatment. Ireland also hosts most of the European headquarters of US tech giants such as Apple, Google, and Meta, also attracted by the attractive Irish tax system. Overall, pharmaceuticals account for 22.5 percent of EU exports to the United States, where many major players have announced major investments.
– Germany, the industrial powerhouse – Germany, the EU’s largest economy, is under particular pressure due to its dependence on exports. It had a record surplus of $84.8 billion with the United States in 2024. The United States accounts for 10.5 percent of German exports, according to German statistics office Destatis, thanks to its large automobile, chemical, steel, and machine industries. The United States accounts for 23 percent of the revenue of Mercedes Benz. While some of that is accounted for by SUVs manufactured in the United States and exported, they risk being hit by any tariff reprisals from the EU. The German central bank warned at the start of the year that US tariffs on German goods could wipe 1.0 percent off its gross domestic product.
– Italy, France in second line – Italy and France, with surpluses of $44 billion and $16.4 billion respectively according to US statistics (French data says the surplus is much smaller), may be less affected overall. Some sectors, however, are heavily exposed, notably the food and wine industries, as is the case for Spain, and American ardor for these products could wane if prices rise to absorb the cost of tariffs. France’s aeronautics and luxury goods sectors are also very exposed. LVMH, the world’s largest luxury conglomerate, generates a quarter of its revenue in the United States. About a fifth of France’s exports to the United States come from the aerospace industry, much of it from Airbus. Like Germany, Italy is also concerned about its automotive sector. Franco-Italian manufacturer Stellantis, particularly Fiat and Peugeot, has suspended its forecasts for the year due to these uncertainties. Austria and Sweden also have surpluses with the United States, at $13.1 billion and $9.8 billion respectively.
© 2024 AFP
