By Josephine Mason and Adam Jourdan
LONDON/MARSEILLE, France (Reuters) – With U.S. President Donald Trump’s latest tariffs officially starting this Friday, businesses across Europe are facing some tough times. Some manufacturers are holding back on shipments, while others are boosting prices or accepting smaller profits. Many in the industry are worried about their very survival.
Beginning Friday, the U.S. will enforce a 15% tariff on a large portion of European exports, part of a more extensive trade strategy that’s shifting global commerce. Although these rates are not as high as once threatened, they are still the steepest we’ve seen since the 1930s.
Andrew Wilson, Deputy Secretary General of the International Chamber of Commerce, shared that it hit many companies hard: “Firms are coming to terms with a historically high tariff rate.” He also mentioned that it’s hard to foresee any real changes unless some devastating consequences for the U.S. economy occur.
The chamber has reported delays in shipments as companies rethink their supply chain plans. Trading with the U.S. seems to be “hellishly more difficult” as they adapt to the new landscape.
In Germany, winemaker Johannes Selbach expressed that the tariffs described as detrimental to both American and European economies. In a storage room filled with crates labeled “USA,” Selbach commented, “These tariffs impact both sides—putting strain on American families in distribution while hurting our wine producers too.” He warned that many jobs and earnings could take a hit because of this situation.
Different industries are experiencing the effects of these tariffs in various ways. While high-end luxury brands have some leverage to adjust their pricing, larger companies may absorb some losses or consider relocating some of their products to the U.S., though full-scale shifts aren’t always feasible.
Even big names like Procter & Gamble are adjusting U.S. prices in lieu of tariff impacts, while Adidas hinted at similar developments.
According to Reuters’ global tariff tracker, at least 99 out of nearly 300 businesses tracked have indicated price increases in light of the current trade tensions, predominantly from Europe.
Trump’s position is that these tariffs aim to address long-standing U.S. trade deficits and to restore American manufacturing, claiming they will lead to more jobs and investments stateside.
UNRELOCATABLE CHAMPAGNE VINES
The global tariff situation is also creating hurdles. Major manufacturing regions like Mexico, Canada, India, and Vietnam face even higher rates than those imposed on South Korea or Europe.
Smaller businesses, in contrast, struggle to adjust their production and supply chain quickly.
Champagne maker Hugo Drappier, who operates his eponymous brand, pointed out that champagne can only be crafted in its specific region of France, saying, “This is a labor-intensive field with many workers that cannot just be transported elsewhere—the champagne vines can’t go anywhere!” Although he noted some delays driven by tariff uncertainties, he remains hopeful for a positive turnaround, seeing the 15% as better than the previously threatened 30%.
Laurent Cohen, the CEO of the family-run perfumery Corania from near Marseille, has been seeking new markets to maintain a presence in the U.S., which is significant, accounting for about a quarter of their sales. However, he anticipates this may involve lower profit margins and higher prices for U.S. consumers.
“I’m happy we now have clarity from the U.S. trade deal,” he shared. “However, with a 15% customs duty on our reasonably priced perfumes, we’ll need to be very creative to adapt and thrive in the U.S. market.”
(Reporting by Josephine Mason and Adam Jourdan in London; Clotaire Achi and Michaela Cabrera in Urville, France; Manon Cruz in Marseille; Stephane Nitzschke, Andreas Kranz, and Swantje Stein in Zeltingen, Moselle Valley, Germany; Ardee Napolitano in Paris; Written by Adam Jourdan; Edited by XX)
