Trump’s Trade Tariffs: Here’s What We Know So Far

The new American President Donald Trump immediately made it clear upon taking office that trade is one of his priorities. He wants to discourage foreign companies and support American companies with import duties and tax measures. What do we know so far about these trade duties, and what do they mean for Europe and the Netherlands?

Import duties on Mexico and Canada: a first step

Trump has announced his first trade tariffs on products from Mexico and Canada. These countries are facing tariffs of up to 25%, with which Trump says he wants to protect American industry and tackle problems surrounding migration and drug trafficking.

Europe has been spared for now, but economists warn that the EU may be next. According to macroeconomist Han de Jong of BNR, Trump mainly uses these levies as a negotiating tool to put pressure on foreign partners.

What does this mean for Europe?

Although there are no direct levies on European products yet, uncertainty is growing among companies. The EU is already investigating possible retaliation if Trump does impose tariffs. Finance Minister Eelco Heinen has indicated that Europe will not sit still and warns of the economic damage of a trade war: “If you impose trade tariffs on the EU, you will really go down the drain.”

In the meantime, many European companies are already preparing for possible import duties. According to the Netherlands Enterprise Agency (RVO), almost 70% of internationally operating companies are preparing for this.

Consequences for Dutch companies

For Dutch companies, the consequences can vary greatly per sector. According to the Central Planning Bureau (CPB), the impact of American tariffs on Dutch exports will remain limited, because only 4 to 5% of exports go to the US. Yet there are sectors that are hit harder, such as the manufacturing industry. Production of vehicles, machines and electronic products could decline by 5 to 6%. At the same time, service providers in, for example, aviation and telecommunications benefit from American services becoming more expensive.

A Dutch company that is already preparing is Oxycom, a manufacturer of sustainable cooling systems. “If rates approach 20%, it will be a challenge,” director Barry Leuverman told NOS. “Then we may have to open a branch in the US.” These types of decisions show how companies worldwide are trying to anticipate Trump’s trade policies.

Energy and taxes as a breaking point

In addition to tariffs, Trump also uses energy and taxes as political instruments. American exports of liquefied gas (LNG) to Europe are increasing, partly because the EU continues to boycott Russian energy. Trump likes to see Europe as a major buyer of American fossil fuels, which could conflict with the EU’s green transition.

In addition, Trump has opened a new tax front by questioning international tax agreements for multinationals. He is threatening sanctions against countries that introduce tax rules that Washington believes are detrimental to American companies. Italy, which imposes a digital services tax on tech giants such as Amazon and Google, has already been mentioned as a possible target.

What next?

Although the exact impact of Trump’s trade policy is still uncertain, the signals are clear: import tariffs, fiscal pressure and energy policy will set the tone in transatlantic relations. For Dutch and European companies it will be a matter of waiting and anticipating what is to come.

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