The consequences of Donald Trump's return to the White House for European companies

The mains issues following Donald Trump's return to the White House

Let us first take a closer look at the economic situation in the United States. Despite an apparently strong economy, the U.S. faces significant disparities. Growth is enviable, with GDP up by 12% compared to its pre-Covid level.

However, several issues persist:

• Social inequalities: The United States remains one of the most unequal countries, despite a low unemployment rate.
• Economic imbalances: Trade deficits continue to widen (reaching nearly USD 1 trillion) despite protectionist measures.
• High public debt: The budget deficit has reached 8% of GDP, fueled by successive stimulus programs.

In addition, Donald Trump's protectionist approach may intensify with stricter customs measures:

• Increased tariffs: A 10% tax on all goods imported into the United States, or even 60% for Chinese products, is being considered. This would raise U.S. tariffs to levels not seen since the 1940s.
• Sectoral impact: The most exposed European sectors include the automobile industry (notably Germany), pharmaceuticals, and agri-food (wine and spirits).

The increased protectionism in the U.S. could have several consequences for European companies, such as:

• Reduced exports: Higher tariffs could lower the competitiveness of European products in the U.S. market.
• Risk of business failures: Certain sectors, particularly SMEs, could be weakened by a decline in export sales.
• Strategic realignment: Faced with trade barriers, European companies may seek new markets or focus more on Europe.
• Monitoring Chinese overcapacity: The diversion of Chinese exports to Europe could heighten competition in the European market.

The European Union will need to be proactive in addressing these challenges:

• A common trade policy: The EU's trade policy could be tested by divergent interests among its member states.
• Defense of strategic sectors: Measures similar to those recommended in the Draghi report, such as the protection of strategic assets (healthcare, industry, energy), may need to be strengthened.

Finally, Donald Trump's policies could also reshape the geopolitical landscape:

• Global conflicts: The U.S. repositioning vis-à-vis Ukraine, China (Taiwan), or the Middle East could create additional uncertainties for European companies.
• Climate transition: Trump's expected withdrawal from climate agreements would contrast with Europe's environmental ambitions, raising questions about the competitiveness of companies facing climate-related constraints.

Donald Trump's return to the White House calls for increased vigilance from European businesses and governments. Faced with a more protectionist U.S. economic policy and an unstable geopolitical context, Europe will need to strengthen its trade strategy, protect its key sectors, and consolidate its unity to address these new challenges.