US tariffs are already having an impact on European exports, ING has said, citing the bloc’s latest export data.
In June, exports from the eurozone fell by 2.4% month-on-month, while exports on a year-on-year basis rose by 0.4%, Eurostat data showed.
With imports rising by 3% month-on-month, this brings the seasonally-adjusted trade surplus to €2.8 billion, down from €15.6 billion in May, ING noted.
‘Highly affecting European exports’
“Tariffs and, more structurally, the loss in international competitiveness are highly affecting European exports,” commented Carsten Brzeski, global head of macro at ING, who noted that the June data also shows an “expected collapse” of European exports to the US (-10% year-on-year), as well as China (-12% year-on-year).
“Despite talks about finding new trading partners to make up for the potential loss of trade with the US, European exports to India and Brazil, for example, were down by some 5% YoY in June,” he noted.
A more accurate picture?
Europe also saw “highly volatile” industrial data for the first few months of the year, driven by the front-loading of US exports ahead of looming tariffs, and in many cases subsequent reversals, with this June data providing a more accurate picture of the situation after tariffs actually come into effect.
“Don’t forget that in June, many European exporters had already been subject to 10% tariffs, automotive producers to 25% and steel and aluminium producers as much as 50%,” Brzeski noted. “The 15% tariffs agreed in July became effective on 1 August.
“The strengthening of the euro since the start of the year, US tariffs, as well as broader uncertainty regarding the future of global trade and fierce competition for European exporters in general, are likely to weigh on European exports moving forward. Currently, it’s hard to see how exports could soon return as a powerful engine of European growth.” Read more here.
