Experts Comment: How Will The New Tariffs Affect Business In The EU?

President Donald Trump announced new charges on the European Union and multiple economies, in a moment he calls “Liberation Day.” He insists that foreign trading partners impose steep levies and block US goods. His team claims the EU alone charges 39% on American products, a figure that many voices call inaccurate.

According to official data, the European Commission sets average charges on American goods close to 1%, while the World Trade Organisation estimates roughly 4.8%. Trump’s figure grows out of a unique formula: the deficit Washington has toward each partner, divided using that partner’s exports to the United States. Many commentators view this method as unusual, since it transforms a trade imbalance into an imagined border fee.

Trump’s administration defends the stance, citing intangible restrictions such as so-called “non-tariff” rules and taxes on consumption. Officials claim these factors boost real costs for American manufacturers and justify the 39% claim. Economists are still skeptical, stating that foreign consumer taxes, such as the EU’s Value-Added Tax, apply equally to domestic and imported items rather than strictly punishing US goods.

 

How Could This Affect Businesses?

 

Levies create new complexities for commerce. Traders that once sourced supplies from the EU might see overhead climb, which could affect wages, hiring, and forward planning. Buyers in the United States might hesitate if sticker prices rise on everyday imports.

Shops in Europe that lean on the American market might face fewer orders if clients shy away from extra fees. Merchants can pass costs along to end-users, though that choice risks slower sales or possible job losses.

Business owners across the Atlantic mention possible workforce cuts if buyers hold back. Shipping lines might rework routes, and suppliers could pursue new contacts outside standard trade blocs. That pivot in ties may also prompt anxious reactions in financial circles.

Banks have revised their projections for economic progress, citing likely dips in output. Traders watch official statements closely, hoping for clarity on new duties. A path to calmer ties may be dependent on negotiations between Washington and Brussels.

 

What Do Experts Think?

 

Here, experts across the globe have shared what they think these tariffs will mean for businesses in the EU…

 

Our Experts

 

• Simon Evenett, Co-Chair, World Economic Forum Council on Trade & Investment
• Martin Hartley, Group CCO, emagine
• Benjamin Avraham, CEO, Okoora
• Calum Chace, Co-Founder, Conscium
• Karim Saleh, CEO, Cerrion
• Kamran Hedjri, CEO, PXP
• Robin Anderson, Head of Product Management, Tribe Payments
• Zaki Farooq, Chief Technology Officer and Co-Founder, PayFuture
• Daire Burke, Head, Swoop Funding, North America
• Prof. Guido Cozzi, Economist In International Macroeconomics and Global Trade, University of St. Gallen
• Vivek Savani, UK Country Manager, iBanFirst

 

Simon Evenett, Co-Chair, World Economic Forum Council on Trade & Investment

 

 

“If implemented, these import tariffs take the average level of US import tariffs back to levels not seen since the early 20th century. The size of the import tariff increases are so large for many countries that they being offset by currency depreciation is very unlikely.”

“Within Europe, U.K. hit much by lower tariff increases (10% versus EU’s 20%). In terms of headline tariff hikes, the UK is Europe’s winner (but is still hit by the 25% auto tariffs and note the role of excluded products). Meanwhile Switzerland is Western Europe’s biggest loser—but a large share of Swiss exports will be exempted because they are pharmaceuticals and gold. Other Swiss manufacturers will need to find third markets and should accelerate export diversification measures.”

“Balkans economies hit harder than Switzerland. Hammers the desirability of Balkans as an export base to USA.”

“Tariff uncertainty will continue. EU, Japan, and India are very likely to retaliate. Escalation spiral of tariffs cannot be ruled out. Will retaliation remain bilateral against the USA or will across-the-board tariffs be instituted? The fate of the open world trading system now lies in the hands of officials in America’s major trading powers.”

 

Martin Hartley, Group CCO, emagine

 

 

“The newly announced blanket tariffs by President Trump creates more uncertainty in the global tech industry. As a European consultancy operating across multiple markets, I see these measures as a potential disruptor to supply chains, investment decisions, and talent.

“The tech industry thrives on interconnected global supply chains, with key components, software, and services crossing multiple borders before reaching end users. These tariffs will ultimately drive up costs and potentially hinder innovation as companies will be forced to rethink sourcing strategies. It could make businesses in the EU avoid using the US to avoid additional costs.

“European countries will be feeling frustrated by the news, which will lead to barriers in the global tech landscape. In an industry where collaboration and innovation is key to seamless cross-border partnerships, any move that affects these connections could have long-term consequences for competitiveness and growth. However, I can understand the frustrations from the US given the tariffs that have been imposed on them for a number of years.”

 

Benjamin Avraham, CEO, Okoora

 

 

“The Trump tariffs will have a major impact on the EU economy in a variety of ways. The tech sector will also be hit, but Big Tech will be affected more than other segments. EU Big Tech is mainly goods oriented and will be subject to tariffs. The companies which will suffer the most are in the semiconductor, electronics, medical and pharmaceutical sectors.

“For instance, pharma and medical manufacturers were the largest sector in the EU among exporters to the US in 2024 (exceeding 130 billion euros). The fact that different countries in the EU will be subject to different tariff levels will add to the confusion. However, much of the smaller start-up community is services oriented (such as software, infotech, cyber, fintech) which will not be subject to direct tariffs, but will be negatively impacted by other related problems. Among these are secondary effects that will harm the tech sector indirectly – such as changes in supply chains, barriers to VC investments, and increased volatility of the US dollar exchange rate vs. the euro.”

 

Calum Chace, Co-Founder, Conscium

 

 

“If – and it’s a big if – the tariffs endure, then trade flows will re-orient away from the US. The global supply chain is complex, and dramatic changes like this normally take time. But Covid showed how a crisis can provoke much faster change than usual. A new global trading pattern in which the US plays a smaller role could enable Europe and other countries outside the US-China AI Duopoly to finally step up and play a full role in the development of the world’s most important technology.”

 

Karim Saleh, CEO, Cerrion

 

 

“From my perspective, these new tariffs could actually serve as a positive forcing function for European startups. If cost becomes a greater factor for US customers, it only heightens the importance of building differentiated, high-ROI products. We have the talent in Europe to do that and so no reason why we can’t continue to deliver.

“At Cerrion we provide video AI agents to support manufacturing customers in the US, and I think it is fair to say I am pretty bullish about the American market right now. Great software has never been a commodity. What wins is technology that solves a critical problem and delivers exponential value. Even if tariffs were to raise costs by 10–20%, the impact would be minimal if you’re delivering 5–10x ROI, which we aim to do. It challenges startups to focus less on pricing and more on value creation.”

 

 

Kamran Hedjri, CEO, PXP

 

 

“As new tariffs threaten to push up the cost of imported goods, retailers operating in cross-border environments face fresh challenges to profitability and pricing strategy. With international supply chains under strain and trade becoming more expensive, businesses are reassessing everything from product sourcing to transaction optimisation.

In this volatile environment, payments can serve as a strategic lever. For retailers processing large volumes of transactions, small inefficiencies can rapidly become costly. Unified commerce solutions that integrate payments across channels can help businesses cut costs, improve authorisation rates, and optimise routing, ensuring that every transaction supports their bottom line.

Faster settlements become especially crucial as access to working capital is squeezed. Real-time financial insights and automated reconciliation give retailers the agility to respond quickly to changing market dynamics. Meanwhile, intelligent risk tools can reduce fraud and chargebacks without damaging the customer experience.

At PXP, we help retailers transform payments from a cost centre into a value driver. Our modular, omnichannel payment solutions are built to improve efficiency, protect margins, and give businesses the tools they need to remain resilient, even in the face of global trade headwinds.”

 

Robin Anderson, Head of Product Management, Tribe Payments

 

 

“Trump’s newly announced ‘Liberation Day’ tariffs, targeting low-cost direct-from-China ecommerce with a 30% tax on all foreign orders under $800, represent a seismic shift for cross-border commerce. Merchants shipping into the US must now factor in longer customs processing times, higher fulfilment costs, and the likely increase in customer service issues related to unexpected duties.

“With cross-border tariffs set to rise, the cost of international goods and services will climb – and merchants are already feeling the pinch. For businesses operating across borders, the increase in duties is not just a logistical headache, but a financial one, threatening already narrow margins and forcing a rethink of their operational strategies. For online sellers, the knock-on effects could include reduced cart conversions, payment disputes, and an uptick in chargebacks as shoppers react to unfamiliar charges or delivery delays.

In this climate, intelligent payments infrastructure becomes a key competitive edge. Advanced payment routing can help merchants reduce transaction costs and avoid unnecessary fees. Faster settlements improve access to working capital, and enhanced fraud mitigation tools help protect revenue when businesses can least afford losses.

This isn’t just about surviving economic headwinds – it’s about using payments as a strategic asset. With the right tools, merchants can adapt quickly, protect liquidity, and make decisions grounded in real-time financial data. Tribe’s platform gives merchants the insights and tools to adapt, whether that’s through intelligent fraud prevention, alternative payment options, or streamlined reconciliation that identifies potential disputes before they escalate.”

 

Zaki Farooq, Chief Technology Officer and Co-Founder, PayFuture

 

 

“The reintroduction of US tariffs on low-value foreign imports, including a 30% tax on sub-$800 orders and even steeper rates for China and the EU, threatens to reshape the landscape for ecommerce and cross-border trade. For merchants reliant on low-cost international fulfilment, the loss of the de minimis exemption will directly affect margins, logistics, and the customer experience.

“As new tariffs increase the cost of global trade, businesses eyeing international growth – or already trading across borders – face mounting challenges. For retail and eCommerce merchants especially, rising duties are squeezing margins and prompting a rethink of cross-border strategies. With Shein and Temu alone accounting for nearly 600,000 daily US-bound parcels under this scheme, the impact on digital-first retail is massive. Higher prices and longer delivery times may frustrate customers, leading to more refund requests and chargebacks unless expectations are properly managed.

“In this environment, efficient international payments become a key competitive differentiator. Tariffs may be out of your control, but improving approval rates to increase your profitability, settlement delays, and currency conversion fees is not. Businesses can cut costs by optimising their payment providers, using local acquirers, and offering region-specific payment methods and currencies that improve both acceptance rates and customer satisfaction.

“In this volatile environment, merchants must reduce friction and control costs wherever possible. That means using local payment methods, real-time transfer rails, and smart routing to reduce currency fees and improve approval rates. At PayFuture, we help merchants scale into new markets without losing control. As global trade realigns, agile payment infrastructure becomes the difference between growth and stagnation.”

 

Daire Burke, Head, Swoop Funding, North America

 

 

“The EU was imposed with a 20% tariff EU exports to the U.S. Small businesses within automotive, machinery, luxury goods, food & beverage are likely to be negatively – this could lead to decreased US sales and potential job losses within these industries.”

 

Prof. Guido Cozzi, Economist In International Macroeconomics and Global Trade, University of St. Gallen

 

 

“Despite Brexit, the UK is still deeply connected to the European economy. If tariffs hit EU exports to the US, European producers may try to shift more goods to the UK market. That could create some short-term price reductions for certain goods. There’s also a broader economic risk – if trade tensions between the US and the EU escalate, investor confidence could take a hit, leading to slower growth in both regions, which would inevitably spill over into the UK.

As for the scenario where the US imposes tariffs directly on the UK – that would be the most damaging outcome. UK exporters would face higher costs in one of their most important markets, making British goods less competitive. That could mean reduced production, job losses, and a weakening of key sectors like manufacturing and food exports. More worryingly, a UK-US trade dispute could also trigger a chain reaction, with the UK retaliating by imposing its own tariffs, further distorting trade flows and increasing costs. Add to that the potential for currency depreciation, and you’ve got a perfect storm of rising inflation, squeezed household budgets, and economic stagnation.”

 

Vivek Savani, UK Country Manager, iBanFirst

 

 

“The long-awaited imposition of Trump’s reciprocal tariffs – coming into force on so-called ‘Liberation Day’ – is upon us. It hasn’t even been three months since Donald Trump took office, but the shadow of tariffs has loomed large in the minds of global leaders and central banks since the US President’s January inauguration.

“Contrary to market fears of a universal application, only countries that impose tariffs on the United States and have a trade deficit with the US will be targeted. While this isn’t the global tariff war that many had initially predicted or a full application of the 16.7% tariff that Trump’s economic programme had laid out in his campaign, it’s still consequential.

“The average tariff rate that will apply to US imports will jump from 4.8% to 10.5%, according to our calculations. Starkly, this means that with the new increase, the average tariff is now back to levels that existed before the GATT agreements of October 30, 1947.

“The Trump administration is primarily targeting seven major players: the EU, Mexico, Japan, South Korea, Canada, India, and China – and unsurprisingly, China is the most affected, with tariffs increasing from an average of 10.2% to 29.5%.

“For many markets, this will be a rude awakening – particularly those that haven’t been subject to US tariffs to date, such as Mexico and Canada. Tariffs will increase from 0.1% and 0.2% respectively to 20% and 25%. For two countries that are deeply integrated into the US economy, this will be painful.

“The long-term impact of these shifting tariffs will be harder to measure. Major tariff announcements inevitably reshape trade balances as consumers adapt and businesses find workarounds. Time will tell what Liberation Day’s true impact will be on global markets in the coming months.”