Europe Under Trump’s Trade Policies: Key Impacts

Donald Trump’s return to the White House in 2025 has reignited global discussions around trade policies and economic strategies. For Europe, his administration’s renewed focus on protectionism, tariffs, and “America First” policies has created both challenges and opportunities.

Understanding the implications of these policies is essential for European businesses to navigate the evolving trade landscape effectively.

During Trump’s first presidency (2017–2021), Europe faced tariffs on steel and aluminum, disputes over digital taxes, and automotive trade tensions. These precedents offer valuable lessons for understanding how his policies may shape the present and future of transatlantic trade.

Key Impacts of Trump’s Trade Policies on European Businesses

1. Tariff Reinstatements and Escalations

One of Trump’s immediate actions in 2025 was reinstating tariffs on European steel (25%) and aluminum (10%), similar to his 2018 trade measures. This move, aimed at protecting U.S. industries, once again put European exporters under pressure.

Automotive Industry:

Trump has signaled potential tariffs on European cars, a recurring issue from his previous tenure. For companies like BMW, Mercedes-Benz, and Volkswagen, which export heavily to the U.S., these measures could lead to a 20–25% increase in export costs.

Agriculture:

European agricultural exports, such as wine, cheese, and olive oil, are also under scrutiny, creating uncertainty for small and medium-sized exporters.

Data Snapshot:

• In 2018, the EU exported €37 billion worth of cars to the U.S. A 25% tariff could add €9.25 billion in additional costs.
• Steel exports to the U.S. fell by 30% during Trump’s first tenure due to similar tariffs.

2. Supply Chain Realignments

Trump’s renewed focus on reshoring American manufacturing has already influenced supply chains. European businesses reliant on exporting to the U.S. now face decisions about shifting production to the U.S. or Mexico to avoid tariffs and remain competitive.

Key Example: European manufacturers like Airbus and Siemens are assessing the viability of establishing or expanding U.S.-based production facilities.

Mexico as a Gateway: With the USMCA agreement (United States-Mexico-Canada Agreement) intact, Mexico remains an attractive destination for European firms aiming to serve the North American market while mitigating tariff risks.

3. Digital and Technology Policies

Trump’s administration has introduced stricter measures on data flows and digital trade, targeting EU data privacy laws like GDPR. The U.S.-EU digital tax disputes have resurfaced, with Trump’s administration opposing Europe’s push for global tech tax reforms.

Tech Giants in the Crosshairs: European companies like SAP and startups in fintech and AI now face regulatory hurdles when operating in the U.S., impacting innovation and market access.

Future Concerns: The potential decoupling of U.S. and European tech ecosystems could stifle cross-border innovation and partnerships.

4. Shifting Trade Alliances and Economic Partnerships

Trump’s trade policies are pushing Europe to strengthen partnerships outside the U.S.

China and Asia: With strained U.S.-EU relations, Europe has deepened trade ties with China, evidenced by the Comprehensive Agreement on Investment (CAI).

Middle East and Africa: Europe is exploring emerging markets in the Middle East and Africa, focusing on sectors like renewable energy, healthcare, and infrastructure.

Statistics:

• EU-China trade volume exceeded €830 billion in 2022, a 23% increase from 2019.
• Africa’s GDP is expected to grow by 3.7% annually through 2025, offering opportunities for European investment.

Lessons for European Businesses

1. Adaptation Through Localization

European firms must consider establishing localized manufacturing hubs in the U.S. or Mexico to remain competitive in the face of tariffs and trade barriers.

2. Investing in Supply Chain Resilience

Diversifying supply chains within Europe and neighboring regions (e.g., the Balkans and Central Eastern Europe) can mitigate risks associated with transatlantic trade tensions.

3. Embracing Digital Transformation

Digital tools, AI, and automation will play a critical role in helping European companies streamline operations and navigate complex regulatory environments in the U.S.

CE Interim: Supporting Businesses in Times of Change

Navigating the complexities of Trump’s trade policies requires expertise, agility, and strategic planning. CE Intérimaire specializes in helping European businesses adapt to global economic changes, providing interim management solutions to:

• Optimize supply chains.
• Drive operational excellence.
• Navigate regulatory challenges.
• Implement digital transformation strategies.

With CE Interim’s support, businesses can confidently address the challenges and opportunities of a rapidly evolving global economy.

Conclusion

Trump’s trade policies, both past and present, underscore the importance of resilience and adaptability for European businesses. By leveraging lessons from his first presidency, investing in regional partnerships, and embracing innovation, Europe can chart a path forward in a challenging trade environment.

With the right strategies, businesses can not only survive but thrive in this new era of transatlantic relations.