Where EU’s rates will hit the strongest

Recent data on rates and consumer decision making are clear: increase the prices of a product due to the highest import taxes, and consumers will resort to a cheaper alternative.

That is not a good omen for certain American products, and the states where they occur, such as the USA. Think of California Almonds, Tennessee whiskey and Michigan’s rearview mirrors.

From 2017 to 2019, Tennessee whiskey exports to the European Union fell from $ 362 million to $ 220 million in the middle of the commercial war of the first term of President Donald Trump, and exports remained low until the retaliation tariffs were suspended, according to a recent research association of the World Commercial Association around the world. Trump 2018 rates were suspended by the Biden administration in January 2022.

“Once the EU lifted the tariffs, Tennessee whiskey exports increased 42% in the subsequent year,” said Daniel Anthony, president of the Trade Worldwide association. “But Tennessee exporters know how retaliation could reduce sales again.”

Thursday, Trump threatened 200% of tariffs on EU wine and alcohol.and said he “It is not going to bend at all” When it comes to the US rates. His treasure secretary, Scott Besent, told CNBC that he does not understand Why the markets would do a big problem Out of this threat, but for some US states, the EU is a great market.

Unlike the rates imposed by the Trump administration, where The US chargers. We have to pay the rates To receive their products, reciprocal tariffs would be imposed on US exports that EU importers pay. The highest prices could reduce demand or close a market.

“There is an expectation that companies lose sales as EU consumers change to less expensive options,” said Anthony.

The data compiled by the commercial association worldwide show that the value of US exports that could be subject to rates would increase five times, from $ 6 billion (based on original Trump tariffs) to more than $ 27 billion.

“This is a great tariff expansion in previous exports,” said Anthony.

EU retaliation rates They are established in two sections: the products hit the last time they are being reupulated on April 1, and then the expansion of additional products, subject to an additional discussion, which could be promulgated in mid -April.

On the percentage, the new analysis on EU retaliation rates shows the companies of New York and Dakota del Norte that potentially have the greatest participation of exports in the reprisal sight, which can affect the demand of their goods: New York (39%), North Dakota (36%), Nebraska (32%), Iowa (26%) and the West Virginia (26%).

On an absolute dollar base, some of the states on the east and gulf coast with the main ports are among the main states that face new EU rates, including New Jersey, Georgia, North and South Carolina, Virginia and Texas. The products of these states go widely, from barrels for alcohol elaboration to tobacco and tobacco products, peanuts, frozen and fresh orange juice, food oils, motorcycles, dishwasher, clothing, footwear, furniture and carpets.

But Anthony said that it is the Almonds of California, Tennessee’s whiskey and Michigan’s rearview mirrors that stop as some of the best examples of acute risk and market needs: “The EU is the largest buyer of these products and reprisal rates will hurt much more.”

Brandon Daniels, CEO of the Corporate Risk Management Consultant, said that EU’s retaliation rates place US whiskey producers at a substantial competitive disadvantage.

“States like Tennessee and Kentucky, whose economies depend significantly on this luxury export, would feel acute economic pressure. This is where commercial policy and policy collide at this time,” said Daniels.

Companies in Tennessee exported $ 575 million in whiskeys to the EU in 2024 (66% of their exports to the world).

In 2024, California exported $ 1.2 billion in almonds bombarded to the EU. The European Union represents 37% of California exports to the world.

From Michigan, companies exported $ 519 million in rear view mirrors to the EU in 2024 (48% of their exports to the world).

In the automotive sector, companies have more space to negotiate.

“In previous tariff conflicts, we have seen that American exporters of critical automotive components, such as Michigan’s precision electronics, often partially absorb the costs of retaliation rates,” Daniels said. “While the essential components will continue to flow, American producers generally share tariff pain with their European buyers, since none of the parties can afford to support the total cost alone. This shared load stands out how interconnected is really the automotive supply chain.”

Red states beyond whiskey states will feel the pain

In the world of manufacturing, molybdenum, which is used in steel production, lubricants, pigments and as a catalyst in the oil industry, is a great export for Arizona to the EU. In 2024, Arizona exported $ 304 million in molybdenum to the EU (89% of its exports to the world).

South Carolina exported $ 223 million in the copolymers of flexible polymer ethylene to the EU in 2024 (59% of its exports to the world). This chemical is used in packaging, hot cast iron adhesives, automotive components and construction materials, due to its durability, flexibility and adhesive properties.

Several other plastic resins also headed the list of South Carolina, and West Virginia, where companies exported $ 146 million in EU plastic resins in 2024 (59% of their exports to the world).

In some areas, the current commercial imbalance of the United States will influence negotiation.

With a commercial deficit of record goods of almost $ 236 billion in 2024, the United States depends on Europe for high -value manufactured products such as vehicles, pharmaceutical products and industrial equipment. But these are sectors in which American negotiators have significant leverage through specific tariffs, Daniels said.

European automobile manufacturers exported approximately $ 54 billion in vehicles to the US in 2022, eclipssing US automotive exports to the EU. An American rate directed in this sector would place Significant pressure on European manufacturers – Particularly Germany, whose automotive industry alone comprises more than 30% of total exports from Europe to the United States, he said.

According to customs data counted by demanding, Pharmacists It represents the largest export category in Europe for the US. UU., With almost $ 92 billion annually.

“While aiming the pharmaceutical products through tariffs could be politically delicate, it would directly affect European pharmaceutical giants, creating strong incentives for Brussels to negotiate. Although the 200% increase in the wine and the liquor that announced that he announced could hurt, the trade will not redeem,” Daniels said.