Trump’s reciprocal tariffs would hit these European Union products that Americans buy the hardest

The U.S. imported roughly $600 billion price of products from European Union member states in 2024, and as President Trump prepares to doubtlessly lengthen his tariffs past metals to a variety of products from allies, some product classes would be hit a lot tougher than others in the newest “reciprocal” commerce battle transfer by the U.S. authorities.

The highest U.S. import from the EU in 2024, by class and greenback worth, was pharmaceutical products, in line with information from the U.S. Commerce Census analyzed by ImportGenius. Included in that $127 billion price of EU imports was semaglutide, an ingredient utilized in the fashionable GLP-1 weight reduction medication from Novo Nordisk and Eli Lilly, similar to Ozempic, Wegovy, and Mounjaro. The GLP-1 compound was the sixth-largest import from the EU to the U.S., at $15.6 billion.

The drug and medical business, general, will expertise amongst the most vital tariff impacts by sector. Surgical and medical devices imports have been valued at $37 billion; medical gadgets, which span CRT Machines, respirators, orthopedic gadgets, and surgical tools, tallied $22 billion. Vaccines, listening to aids ($1.3 billion) and synthetic joints ($2.5 billion) have been additionally amongst high imports in 2024.

Drug giants together with Lilly, which has a significant presence in Eire, and Novo Nordisk, which is predicated in Denmark, have been rising their manufacturing footprint in the U.S. attributable to demand for weight-loss medication, with Lilly investing billions in new services, together with R&D services close to its company headquarters in Indiana, and Novo Nordisk investing in North Carolina.

Trump mentioned Sunday that he deliberate to slap reciprocal tariffs on “each nation” that imposes import duties on the U.S. “Very merely it is in the event that they cost us, we cost them,” he mentioned on Air Power One, NBC Information reported.

President Trump’s motion for now’s solely issuing a presidential memorandum on the tariffs, and CNBC discovered on Thursday that the tariffs would possible not go into impact for no less than just a few months. The White Home mentioned on Thursday that tariffs could possibly be levied in response to VAT taxes, that are utilized in the EU, Canada, Mexico and plenty of different international locations, or devalued currencies. Sending merchandise by one other nation to keep away from tariffs will result in reciprocal tariffs as properly.

Amongst products the White Home cited in a reality sheet as unfair in commerce and tax observe are shellfish and autos between the U.S. and EU; ethanol between the U.S. and Brazil; and commerce in bikes between the U.S. and India. The White Home additionally talked about the digital companies tax that many countries cost U.S. tech firms, as Trump’s aggressive stance on worldwide financial relationships grows to cowl a wider vary of company tax threats.

Exemptions for varied industries similar to prescribed drugs or autos could be thought-about, in line with earlier reporting together with feedback from Home Speaker Mike Johnson to Reuters, however Trump mentioned in Oval Workplace feedback to the press on Thursday that there will likely be no exemptions for any tariffs put in place. Trump indicated on Thursday that auto import tariffs are on the manner, too, in line with a Reuters report.

Nonetheless, whether or not Trump will observe by on these tariffs, on which international locations and through which product classes, stays unsure. “I’ve determined for functions of equity that I’ll cost a reciprocal tariff,” Trump mentioned in the Oval Workplace on Thursday. “It is truthful to all. No different nation can complain.”

Howard Lutnick, Trump’s nominee for Commerce secretary, will lead research to be accomplished by April 1 on the tariffs plan.

Commerce consultants say a reciprocal commerce battle is simpler mentioned than accomplished.

“Declaring reciprocal tariffs is not going to be simple,” mentioned Josh Teitelbaum, senior counsel of Akin, who helped craft the Trans-Pacific Partnership commerce deal. “It would be a logistical nightmare to establish gaps in tariff charges throughout products in a number of counties. Extra analysis must be accomplished with a view to perform one thing of that magnitude.“

There are a number of examples of U.S. exports tariffed by the EU. US attire, equipment, cotton, and t-shirts are subjected to a 12% tariff.  The EU additionally prices a ten% tariff on U.S. autos whereas the U.S. levies a 2.5 % tariff on European vehicles, and a 25% tariff on all imports of sunshine vans.

In accordance with Commerce Partnership Worldwide’s evaluation of the approximate worth of the new EU tariffs, companies in the United States pays a price ticket of round $2.9 billion per week, or $409.5 million per day, with the drug business taking the largest hit.               

“Nationally, a few quarter of all EU imports are prescribed drugs,” mentioned Dan Anthony, president of Commerce Partnership Worldwide. “For prescribed drugs alone, companies nationwide will likely be paying $100 million/day in new potential tariffs.”

Teva Prescribed drugs, the world’s largest producer of generic medication, can also be amongst the high importers from Europe in the pharma house.

U.S. states will really feel the pinch to various levels, with the top-state paying EU tariffs, in line with the Commerce Partnership Worldwide evaluation, being Indiana, the company headquarters of Eli Lilly. Medical tools and prescribed drugs account for greater than 75% of the potential new tariffs paid by firms in Indiana.

The state of New Jersey additionally has vital publicity, unfold throughout passenger autos (15%), petroleum products (11%), prescribed drugs (8%), private care products, like perfumes and make-up (6%), and medical gadgets (5%).

General, make-up and fragrance imports to the U.S. from the EU reached $12.4 billion in 2024.

North Carolina ranks No. 3 in the nation, with prescribed drugs accounting for greater than 44% of the state’s imports.

U.S. has collected $264 billion in tariff duties below Trump, Biden

The impression of the tariffs will likely be felt by the companies that import EU products in for his or her enterprise. Firms have been coping with larger tariff payments for years, with greater than double the stage of tariffs collected throughout the Biden administration than throughout Trump’s first time period.

U.S. commerce battle tariffs have generated greater than $264 billion of upper customs duties collected for the U.S. authorities from importers, as of the finish of final 12 months, in line with analytics and evaluation from the Tax Basis.

Out of that whole, $89 billion (34%) was collected throughout the Trump administration. The remaining $175 billion (64%) was collected throughout Biden’s time period.

At the moment, the nationwide tariffs invoice to the enterprise world is $78 billion, based mostly on the 2024 information from Commerce Partnership Worldwide. That might rise to over $400 billion if all of Trump’s new and threatened tariffs, from metal and aluminum, to Mexico, Canada, China and the EU, are enacted. General, firms in the U.S. pays $43 billion regarding tariffs imposed by Trump on China utilizing powers below the Worldwide Emergency Financial Powers Act of the govt department, and one other $11 billion in steel-aluminum tariffs. The IEEPA tariffs invoice associated to Canadian imports is $103 billion; whereas it is $126 billion for Mexican commerce; and $149 billion for EU products, in line with information supplied by Commerce Partnership Worldwide.

Peter Boockvar, chief funding officer of Bleakley Monetary Group, mentioned whereas understands the need to push again in opposition to international locations that tariff U.S. products greater than we tariff their items, the commerce battle must be short-term, not long-term in nature.

“If we’re doing it to boost cash and to guard U.S. industries, there will likely be extra losers than winners on the enterprise aspect and customers will likely be left paying extra for issues,” mentioned Boockvar. “Sure, larger tariffs may be only a one-time step up in pricing, however the very last thing customers want after a 20%+ cumulative rise of their value of dwelling over the previous few years, is one other enhance.”

The most recent U.S. client inflation information for the month of January confirmed a bigger than anticipated rise, one other signal amongst many that the current progress the Federal Reserve had made in bringing inflation again down nearer to its 2% goal has stalled out, although wholesale inflation numbers this week have been barely extra encouraging.

From an general perspective, together with freight forwarders who transfer a big portion of commerce on behalf of firms, Ikea seems to be the high U.S. consignee of EU shipments. Wine and spirits logistics firm Hillebrand (a part of DHL), and Amazon, are amongst the high ranked U.S. firms importing from the EU.

Outdoors of prescribed drugs, equipment and mechanical elements ($89.8 billion), autos ($60.3 billion) and electrical equipment and elements ($39.2 billion), are high EU import classes. In autos, that contains Mercedes, Michelin, Ford, Volvo, Volkswagen, and BMW.

A assessment of the Payments of Lading, which element the objects inside import containers, present a way more expansive listing of products, from imports for Bosch and John Deere, to tiles from Eire and Spain, lithium-ion batteries from Poland, BMW-specific lithium-ion batteries, truck seats, Irish Whiskey, Goya Meals imports from Spain, wind generators and spare elements from Denmark (the place renewable vitality big Vestas Techniques is predicated), metal pipes, and scaffolding.

The posh client, and collector, will face a much bigger invoice, too.

“You could have $9.4 billion in treasured metals, stones, and pearls being imported from the EU,” mentioned William George, director of analysis for ImportGenius. “For the luxurious investor, $5.5 billion in artistic endeavors, collector’s items, and antiques have been imported final 12 months.”

Work topped this class at $4 billion, adopted by sculptures, at $800 million. Leather-based purse imports have been valued at round $2.5 billion.

Americans having fun with their bubbly from glowing water to Moet Hennessy might also see a rise of their favourite beverage.

Glowing water from 4 main manufacturers (Evian, Perrier, Pelligrino, and Gerolstiner) reveals a mean of 2400 twenty-foot equal models (TEUs) a month, year-over-year.

General, wine imports have been $5.5 billion in 2024, in line with George. “That is round 14,000 containers a month from EU international locations. Nearly half a container vessel.”

Grape-based brandies (cognac, armagnac) topped the spirits class at $1.3 billion. Vodka was second at $1.1 billion. Glowing wine was $1.7 billion. Additional virgin olive oil imports from the EU have been a $1.8 billion business in 2024.

Imports characterize 15 % of GDP, in line with Larry Lindsey, CEO of the Lindsey Group. “If we pay the entire factor (which we most undoubtedly is not going to) a ten % tariff on the whole lot would be about 1.5 % of GDP. My again of the envelope says we pays about 0.9 % of GDP,” he mentioned.

However in his view, the impression of not sustaining the present tax charges and guidelines would be two to a few occasions as massive attributable to behavioral results.

“Proper now, our deal maker is selecting the low-hanging fruit and constructing momentum to determine that he’s unstoppable. It’s working. The top recreation goes to be a ten % tariff on all people with a unified a lot larger charge on China. That’s going to care for the [transferring of cargo] downside of Chinese language items.”

India can also be being focused by the newest tariffs. Whereas President Trump has cited the instance of Harley-Davidson bikes in threatening India for retaliation based mostly by itself commerce duties on international products — a difficulty India has already responded to straight as India Prime Minister Narendra Modi involves the White Home on Thursday — there are a lot of classes of products from the key rising markets commerce associate that the U.S. market and companies depend on.

“India has extra tariffs than almost another nation,” Trump mentioned in the Oval Workplace on Thursday.

In accordance with Commerce Partnership Worldwide’s database, potential new metal/aluminum tariffs on India may attain $190 million, based mostly on 2024 import ranges. The U.S. firm most-exposed to reciprocal tariffs is Walmart, which represented 62% of all imports from India to the U.S. in 2024. Different imports embody objects for IKEA; the antibiotic doxycycline; shafts for Kawasaki; Lockheed Martin plane structural elements; aluminum castings; McCormick spices like celery seeds and cumin seeds; elements and equipment for transportation firm Worldwide (previously Navistar); a whole bunch of things destined for retailers, from T.J. Maxx to Ralph Lauren; and imports for Schneider Electrical.

Correction: The highest-state paying for EU tariffs if enacted on all industries would be Indiana, in line with a Commerce Partnership Worldwide evaluation. An earlier model of this text misstated the supply of the tariffs information.