European companies faced renewed trade uncertainty on Monday after U.S. President Donald Trump announced plans to impose a 30% tariff on imports from the European Union starting August 1, with no indication of any exemptions for key industries such as automotive or spirits.
The move sparked concern across European equity markets, as major carmakers—including Volkswagen, Stellantis, Renault, BMW, Mercedes-Benz, and Porsche—saw their shares slip by about 1-2% in early trading.
Trump’s announcement, which also applies to imports from Mexico, intensified pressure on Brussels to reach a resolution and avoid significant economic fallout for the EU. The new 30% tariff comes in addition to existing sectoral duties, including the 27.5% levy on EU autos already in effect since April.
This latest escalation has complicated the landscape for European businesses, making long-term planning more challenging and heightening operational risks, according to Pal Skirta, analyst at Metzler Equities.
European firms with substantial exposure to the U.S. market also struggled. Pernod Ricard’s shares fell 1.5%, and Remy Cointreau, a key cognac producer, dropped around 4%. Diageo, however, managed to edge higher by over 0.5%.
Meanwhile, luxury giant LVMH and companies such as Nestle, Procter & Gamble, and Reckitt Benckiser also recorded declines, reflecting the widespread unease prompted by the looming tariffs.
With around $976 billion of two-way goods trade at stake, the prospect of intensified tariffs is adding considerable volatility to one of the world’s largest trading relationships.
As of 11:18 AM (GMT+2), the Euro Stoxx 50 index exhibited a downward trend, with a decrease of 0.58% or 31.11 points to 5,352.37 points.
