Trump and the customs threat of July 9th

US President Donald Trump had threatened to raise tariffs from 50 percent on imports from Europe from June 1st. However, the White House extended the customs break until July 9th. This decision about which the Reuters news agency reported on May 26 reflects an inevitable reality: the trade between the United States and the European Union is of crucial importance in both directions.

In 2024, 20.6 percent of EU exports accounted for the United States. Their imports from Europe far exceed their own exports into the old continent.

Transatlantic trade is not a zero -sum game, but an engine for mutual prosperity. Nevertheless, the threat of customs continues to float over many industries that depend heavily on the US market, such as luxury goods, fashion, cosmetics and alcoholic beverages.

Luxury and fashion: potential first victims

“We need rules,” warns Luc Lesénécal, President of the textile brand Saint-James, to the AFP news agency. According to S&P Global, almost a quarter of the sales of the large European luxury groups come from the United States. Some brands like Birkenstock achieve up to 46 percent of their sales there. After the customs threats of Trump, the Shallenic Couries of LVMH, Hermès, Kering or Burberry fell by three to four percent.

Building a factory on American soil is “impossible at short notice,” says Claudia d’Arpizio, partner at Bain & Company. There are “neither the skills nor the human resources”. Only LVMH with his brand Louis Vuitton partially produces in the United States – but with operational difficulties.

French SMEs also affected

At Saint-James, a SME resident in Normandy, which is known for its ringing shirts worldwide, 40 percent of sales are achieved in export, a third of them in North America. The potential increase in tariffs to 16.5 percent would make a ring shirt from $ 140 to $ 155. And in an industry in which the collections are prepared six months in advance, the uncertainty is loading. “Passing on the increases? Immediately or later? And what will the other brands do?” Asks Manuela Horeau, who is responsible for the company’s export business.

Essilorluxottica at the forefront of commercial difficulties

With 3,800 sales outlets of brands such as Lenscrafters, Oakley and Sunglass Hut in the United States, essilorluxottica is at the forefront. The dependence of the group, which achieves almost 45 percent of its sales in the United States at almost twelve billion euros, increasingly its susceptibility to Asian production. Some products from China are already taxed at 145 percent, articles from Europe with up to 20 percent. According to the BFM Bourse, the group expects price increases “in the single -digit area” and tries to diversify its supply chains.

A potentially systemic shock

In addition to fashion, the sectors such as spare parts, pharmaceuticals (120 billion euros in exports in 2024) and technology products are also threatened. The exposed actors include Volkswagen, Safran, Bayer, Heineken, Novartis, Roche or Diageo. “We know how to deal with exchange rates or energy prices. But retroactive tariffs are very complex,” emphasizes Luc Lesénécal.

An agreement to reach, but the clock ticks

France’s President Emmanuel Macron is “confident” with regard to the outcome of the negotiations between Brussels and Washington. However, the time window is short: the talks must be completed before July 9th. After this date, Trump could make his threats come true.

In the meantime, European companies are feeling. “We work with our hands. The machines cannot do what we do,” emphasizes Viviane Rête from Saint-James. It is a call to protect the people behind the ‘Made in Europe’ label.