US customs duties: European countries unequal in their response to this new agreement

An agreement that is not unanimously supported by the Twenty-Seven. US President Donald Trump announced on Sunday, July 27, customs duties of 15% for all European Union countries . But these countries, whether they are exporters or not, will not be penalized in the same way when the measure comes into force on August 1.

In terms of value, Germany is by far the largest exporter of goods to the United States, worth €137.9 billion in 2024, followed by Ireland and Italy, with €61.6 billion and €54.8 billion respectively, according to Eurostat data. France is less exposed, but the leading food and luxury goods companies will be particularly hard hit.

The EU as a whole will have a trade surplus with the United States of €201.5 billion in 2024, according to the US Bureau of Economic Analysis (BEA). Only China has a higher amount.

But this agreement reached by the President of the European Commission is creating sharp disagreements among the leaders of the member states. Some, such as Germany and Italy, are welcoming it, while others, such as France and Hungary, are speaking out. Hungarian Prime Minister Viktor Orbán, for example, strongly criticized the deal, claiming that Donald Trump "ate Ursula von der Leyen for breakfast," while the Spanish Prime Minister stated on Monday, July 28, that he " supported the trade agreement" concluded the day before, but "without any enthusiasm."

As the EU's largest economy, Germany achieved a record trade surplus with the United States in 2024, reaching €72.6 billion. The United States alone accounts for 10.5% of German exports, according to the German statistics office Destatis. Americans are keen on German car brands, as well as machine tools and pharmaceutical products "Made in Germany."

The United States was the largest export market for German vehicles last year (13.1%), even though many German manufacturers have factories located on the other side of the Atlantic where they produce for the American market. The latter have been very critical of the agreement concluded with the American president, believing that this tax will greatly weigh on their results . "The duties "The 15% US tariffs , which also apply to automotive products, will cost German car companies billions each year," said Hildegard Mueller, president of the German car manufacturers' association VDA. The European car manufacturers' lobby (ACEA) nevertheless welcomed a welcome "de-escalation" in a context of "grave uncertainty."

The German central bank warned earlier this year that the imposition of US tariffs on German goods could reduce the country's gross domestic product by 1%. This didn't stop German Chancellor Friedrich Merz from defending Sunday's trade agreement. This hard-fought deal, he said, "prevents an unnecessary escalation in transatlantic trade relations."

"We have been able to preserve our fundamental interests, even though I would have liked to see more relief in transatlantic trade," he added, expressing particular relief for the automobile industry "where the current customs duties of 27.5 % will be almost halved, to 15 % . " "It is precisely in this area that the rapid reduction of customs duties is of capital importance," according to the leader of Europe's largest economy.

Ireland has the largest trade surplus among EU members, with a value of €74.3 billion. Ireland exports more than a quarter of its products to the United States. This is largely due to the presence in Ireland of major American groups, particularly pharmaceutical companies such as Pfizer, Eli Lilly, and Johnson & Johnson, which have set up shop in this European country to benefit from a 15% tax on large corporations, compared to 21% in the United States.

These companies can thus host their patents in Ireland and sell on the American market, where drug prices are traditionally higher than in the rest of the world. Donald Trump clarified on Sunday that the pharmaceutical sector would not benefit from special treatment. Ireland also hosts most of the European headquarters of American tech giants, such as Apple, Google, and Meta, which are also attracted by Ireland's attractive tax regime.

The Irish government said in a statement that it "regretted" the new rate, but welcomed the fact that it provided "a form of necessary certainty" after months of announcements and threats in all directions in trade relations.

Italy and France, with trade surpluses of €37.7 billion and €14 billion respectively, according to the Americans, would likely be less affected. However, the impact varies from one sector of activity to another within each of these two economies.

The food and wine industries in particular would be affected in both countries. Americans are accustomed to consuming products "Made in France" and "Made in Italy," but could become significantly less fond of them if prices rise to reflect tariffs. The luxury goods sector is also highly exposed to a drop in sales.

For the world's leading luxury group, LVMH , a 15% tariff "would be a good result," the group announced last Thursday when it published its half-year results, which were marked by a drop in net profit and sales. The French giant believes it can compensate by raising prices and optimizing production, particularly in the United States.

Italian Prime Minister Giorgia Meloni defended the agreement, which she said avoids "a trade war within the West with unpredictable consequences," in a joint statement with her Deputy Prime Ministers, Antonio Tajani and Matteo Salvini. The Prime Minister is still waiting to see the details to "formulate a better judgment" and hopes to see exemptions "particularly for certain agricultural products."

In France, the government's reactions were much less warm . François Bayrou denounced Monday as "a dark day" when "an alliance of free peoples, gathered to affirm their values and defend their interests, is resigned to submission ." The Minister for Europe, Benjamin Haddad, judged on X that "the trade agreement negotiated by the European Commission with the United States will bring temporary stability to economic actors threatened by the American customs escalation, but it is unbalanced." A government that seems not to want to stop there, while the Minister Delegate for Foreign Trade, Laurent Saint-Martin, calls for a "rebalancing" and assures that "the die must not be cast."