US-EU tariffs Chemicals, pharma, autos face lose-lose situation

Donald Trump's August 1 deadline for "reciprocal tariffs" on most of the world is approaching. As the US President also threatens 30% tariffs on imports from the European Union and the EU threatens retaliatory action, we broke down how dependent these two massive markets are on trading with each other.

Analyzing trade dependency reveals that the chemicals category (which includes pharmaceuticals and fertilizers) could be worst-hit. A whopping 30% of EU exports in that category go to the US, while 45% of chemical-related imports in the US come from the EU.

In terms of the EU's total exports to the US, the chemicals category has the second-largest share at 32%, trailing only the machinery and transport equipment segment (39%), which includes cars. (The latter sector has its own notable dependencies: 20% of EU machinery and transport exports go to the US, and 16% of US imports in this category come from the EU.)

March foreign trade data again reveals the importance of the chemicals sector on both sides of the Altantic. Total exports from the EU to the US surged to EUR 67.6 billion from EUR 54.1 billion in February, with chemicals being the key driver -- jumping to EUR 34.1 billion in March from EUR 22.8 billion a month earlier. (This spring, many companies were front-loading planned imports of all kinds of goods to get ahead of Trump's tariffs.)

Beverages, tobacco, and animal & vegetable oils are other sectors notable for their EU-US trade dependence, though their absolute value is much smaller than chemicals, drugs and fertilizers. (Trump is also threatening a separate levy on pharmaceutical imports for Aug. 1.)