President Donald Trump maintains his policy of imposing high tariffs on business partners, so the European Union faces a potential 30% tariff without an agreement, and then stopped above the 20% tax levied in April and then stopped at a rate of 50% in May.
The European Union has avoided direct vengeance till date. The scope rating (scope) hopes to continue this cautious approach, even the European Union prepares a possible counter-supply. Nevertheless, from the point of view the tariffs are at risk of growing asymmetrics, especially if American levy on US levy US exports grow more faster than the European Union Levy.
Model-based projections of Scope suggests that 15% of the US tariff implementation will be trimmed to increase the Euro region and the European Union’s development within a year by increasing the effective US tariff on the export of the European Union within a year, which is excluding the proposed-par-board 30% rate (Figure 1The estimate assumes that the levy has been threatened with pharmaceutical exports.
The most exposed European Union economies are with a large trade surplus and/or significant trade with the US, such as Germany and Ireland, with the influence of high tariffs, were also indirectly felt through their impact on global supply chains.
Among the four largest economies of the European Union, the Germany, France, Italy and Spain-Germany and Italy are the weakest, each of which is facing an estimated short-term production loss of 0.4pps. High tariffs will reduce the output of Spain by a medium 0.3pps in medium runs. France is expected to experience a more marginal cumulative decrease in the production of 0.2pps in the medium period.
Trade stress reduced the decrease in the previous month of scope to 1.1% from 0.5PPS for the development of the Euro sector for 2025, although the development was expected to increase by 1.5% next year, raised by fiscal stimulation in Germany and high defense expenses in the European Union.
