How the Next US Presidency Will Impact European Businesses

On November 5, voters in the United States will choose between Donald Trump and Kamala Harris for the next president. The candidates offer sharply contrasting visions for America and its role in the global economy.

European business executives and policy-makers are concerned about the potential business impact of the Trump versus Harris presidency on EU companies.

In short, Harris is expected to maintain more stable trade relations while Trump's proposed tariffs threaten to significantly disrupt EU exports, particularly in sectors like automotive and manufacturing. Germany and Italy's economies are notably the most vulnerable to a Trump presidency.

Leading up to November 5, European leaders are preparing contingency plans to address potential US trade aggression, highlighting the urgent need for strategic autonomy and resilience in navigating either scenario for transatlantic relations.

The findings, in short

Policy Impacts on Trade and Tariffs

The contrast between Trump’s proposed 10-20% import tariffs and Harris’s expected trade relations stability heavily impacts EU export sectors, especially automotive and manufacturing. Trump’s tariffs may lead to significant GDP losses for European economies, with Germany and Italy among the most vulnerable.

Economic and Market Volatility

A Trump presidency will likely introduce heightened economic volatility, affecting currency stability, particularly for the euro, and potentially eroding profits for European exporters. Harris’s approach will likely foster more predictable economic conditions, although ongoing global challenges could create market uncertainties.

Strategic and Regulatory Adjustments

Both administrations could drive European companies to reevaluate US partnerships and supply chains. Trump’s policies might necessitate relocating production to the US or supplier diversification, while Harris’s approach fosters regulatory cooperation. Supply chain resilience and agility will remain a priority in both scenarios.

Three recommended actions

1. Diversify Trade Partnerships

2. Invest in Strategy and Innovation

3. Cooperate with other European Businesses