US tariffs and the uneven impact across cities in Europe and Asia

The tariff rates announced by US President Trump last week bring a measure of certainty to the near–term global trade landscape, even if that clarity comes in the form of historically high tariffs and downward pressure on global growth. For cities across our Europe and Asia Cities & Regions service the outlook is mixed.

The EU will face a 15% tariff on most exports, and whilst this is high, it does lead to the EU getting one of the lowest rates among the US’ key trading partners. Despite the reduction in auto tariffs, this still includes the automotive regions of Stuttgart, Upper Bavaria, and Bremen in Germany, as well as auto supply chain dependent regions across Austria, Slovakia, and Hungary given the large share of trade in these regions with the US.

Uncertainty remains high for the EU’s large pharmaceutical sector, as comments from President Trump and the ongoing Section 232 review means that the current 15% rate may increase. This will reduce domestic investment and trade in the sector and poses specific risk to regions such as Cork and Copenhagen.

Like the EU, Japan and South Korea face a 15% tariff on most exports, including their important auto manufacturing sectors. This provides some relief to auto regions such as Aichi in Japan and Ulsan in South Korea. Higher rates of around 20% have been agreed across much of the rest of the Asia Pacific.

For China, talks are ongoing and while a deal on magnet and rare earth has been announced, no decision has been made for electronic goods, which could be critical for the three largest exporting provinces to the US—Guangdong, Jiangsu, and Zhejiang. The interplay of tariff rates across Asia Pacific and China and the new transshipment levy will be important to watch as this may see less frontloading and reduced supply chain diversification away from China.

Download the full report to explore the detailed impact of US tariffs across regions and industries.