European Businesses and the Trump Effect
Industry-Specific Impacts to Watch in 2025
Hey there Founder!
For those of you who know me or who have followed me for some time, you know that I don’t get political. It’s not a topic I like to venture in necessarily due to the highly subjective nature of it and the world getting more pushed to the extremes on either side showing a troubling, volatile trajectory rather than one of sustainable collaboration. However, it will be amiss of me to fail to note the impact that the US-presidency has on the world and what we can expect of Trump entering office once-more in less than a week’s time.
VERY big note beforehand – I am not, nor will likely ever be a political activist, I’m barely one to understand it all, let alone advocate for one side or the other. These views here are, as mentioned, subjective and my beliefs on what certain industries can expect not only in 2025 but for the next 4 years. There are too many caveats to name them all, but a main one would be – no, I am not taking EVERYTHING into consideration. It is a 2000 word blog post, not a 20,000 word doctoral thesis. Take out of this what you will.
As Donald Trump prepares to re-enter office on January 20th, 2025, global markets are bracing for a potential reshaping of policies that could disrupt trade, regulations, and international relationships. For European businesses, understanding which industries are likely to face the most significant shifts will be critical to staying competitive but also just surviving in this landscape.
This article dives into the likely impacts on key European industries and offers strategies for businesses to prepare for the changes ahead. I have attempted to make these suggestions as basic as possible.
1. A New Trade Landscape
Trump’s administration is expected to renew its “America First” approach, which could lead to shifts in trade policies, tariffs, and economic partnerships.
While European businesses have adapted to protectionist tendencies in the past, renewed pressure on transatlantic trade may require industries to rethink their strategies.
Not only are tariffs upon the EU expected to fall hard, but there is mention of tariffs of up to 60% being set on China as their “trade surplus reaches a record of nearly $1 Trillion.” according to The New York Times.
?Chinese merchants and manufacturers are supposedly preparing for this by exporting their headquarters to more neutral territories to avail of better trade agreements with the US.
2. Industries Most Likely to Be Affected
Automotive:
European car manufacturers, especially in Germany, may face higher tariffs on exports to the US. This is detailed in the “Project 2025” plan the Republican Party has prepared to ensure their goals are met as soon as Trump sets foot in the office.
During Trump’s previous term, the threat of tariffs on European cars loomed large, and a similar stance could return. This would particularly impact luxury brands like BMW and Mercedes-Benz, which have significant export volumes to the US. Furthremore, Volkswagen Group has assured people that they won’t shut down three manufacturing plants as was initially stated in 2024, but are rather going for a smoother and more socially responsible way of letting go of 35,000 jobs by 2030… According to DW at least. But this is not going to be easy on them and the Automotive giant is certainly going to be facing issues in the coming years.
What to Do: Diversify export markets to reduce reliance on US sales and explore new production facilities within the US to circumvent tariff implications.
Technology:
With growing concerns over data sovereignty and cybersecurity, Trump’s policies could lead to stricter regulations on European tech companies operating in the US. Restrictions on technology sharing and exports, particularly in AI and semiconductor sectors, could also escalate.
What to Do: Focus on compliance with US regulations while prioritizing R&D efforts that align with local and global needs. Partnerships with US-based firms may help mitigate some risks. When it comes to compliance, Xponential Ecosystem quite literally offers Compliance as a Service business model so check them out if you’re dealing with US markets (I am part of the startup itself, it’s not an affiliate link).
Agriculture:
The agriculture sector could experience challenges due to potential subsidies and trade barriers. European farmers, already facing stiff competition, may find it harder to export to the US, especially if Trump introduces more protectionist policies favoring American producers.
领英推荐
Farmers saw huge issues with the Ukrainian war as the market got flooded with grain and other produce, forcing our producers to store additional produce or find ways to dump it at lower prices before the good-by dates. This stress has affected my family too – we own a small-ish farm in Bulgaria in the Sungurlare Municipality, in the Bourgas Region around our village called Dabovitsa. If you’d like to check it out and support us, here’s the link to our website – Adan Village.
What to Do: Strengthen intra-European trade agreements and explore alternative markets in Asia and Africa to offset potential losses.
Pharmaceuticals:
Changes in intellectual property laws and export policies may affect European pharmaceutical giants. Trump’s emphasis on reducing drug prices in the US could lead to tighter restrictions on imports, which may hit European manufacturers.
What to Do: Engage in proactive lobbying efforts and ensure compliance with new regulatory standards to maintain access to the US market. This however is not likely to result in immediate success so anybody in these fields needs to prepare to be hit in the profits for a while.
Energy:
Trump’s potential rollback of renewable energy policies could disrupt European renewable energy firms that rely on partnerships or subsidies tied to US policies. On the flip side, traditional energy sectors like oil and gas may find renewed opportunities in the US market.
What to Do: For renewable energy businesses, prioritize partnerships within Europe and other markets embracing clean energy. Traditional energy firms should assess opportunities in the US while preparing for long-term shifts toward renewables globally.
3. Preparing for the Impact
To navigate the complexities of a Trump administration, European businesses should take proactive steps to safeguard their operations and growth.
4. Short-Term vs. Long-Term Impacts
While some industries may feel the effects of Trump’s policies immediately, others may experience gradual changes over the next few years. For instance, tariffs and trade negotiations will likely dominate the early months of his administration, while regulatory shifts may take longer to materialize.
Businesses that adopt a forward-looking approach will be better equipped to thrive in both the short and long term – it’s pretty much always the case. If you always try to react to everything happening around you, you’ll end up drowning instead of thriving.
Conclusion
The return of Donald Trump to the US presidency brings both challenges and opportunities for European businesses.
While some industries may face headwinds, others may find new paths to growth.
By understanding the potential impacts and preparing accordingly, European businesses can position themselves for success in an unpredictable global landscape – just be wary of the potential threats and opportunities out there. It’s why Marketing Research and PESTLE analysis are so crucial to companies.
Good luck and have a successful start to your 2025!
Lenard