EU, in negotiations with Trump - Which European country would be most affected by US tariffs?
Germany and Ireland stand out as the two EU economies most exposed to higher US tariffs. Brussels is working towards a trade deal with Washington, amid threats that future pharmaceutical tariffs could reach as much as 200%.
When US President Donald Trump imposed a new 25% tariff on imported cars and car parts in April, Germany was singled out as the EU country with the biggest losses. The tariffs could cost Berlin 0.4% of GDP in the long run, according to an estimate by Brussels-based think tank Bruegel.
According to one report, the damage to the European economy could be around 0.3% of EU GDP, depending on the outcome of the negotiations. This compares with the 1.1% real GDP growth expected in the bloc in 2025, according to the European Commission's forecast.
In 2024, the United States was the EU's largest partner for goods exports, accounting for 20.6% of all its goods exports outside the bloc. Pharmaceuticals accounted for 15% of exports to the US. They were followed by the automotive sector.
Until there is more clarity on potential US tariffs on pharmaceutical products, "the automotive sector will be most vulnerable to US tariffs, as there are no major exemptions planned," analysts say. The car industry was hit with a 25% tariff in April. "The tariffs alone could cut around 8% of the EU's total trade volumes over the next five years," the economists say.
The European countries most at risk include Germany, Ireland, Italy, France and the Netherlands. The German economy relies on exports, driven by the country's auto sector. Almost a quarter (22.7%) of total German exports go to the US. Berlin is expected to be hit hardest by US tariffs, compared to other countries.
In terms of long-term impacts, Ireland will be one of the most affected countries, as more than half of its goods exports (53.7%) go to the US market. If the pharmaceutical sector is hit with tariffs, Ireland will be the EU economy most at risk, analysts explain.
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