EU companies taking a hit ahead of deadline
European officials are working to secure a trade deal with the Trump administration, as regional companies sound the alarm over financial hits even before reciprocal tariffs have come into play. Earlier this month , U.S. President Donald Trump said he would slap a 30% tariff on all goods imported to America from the European Union, starting Aug. 1. Investors are now awaiting developments in EU-U.S. negotiations, though a trade agreement is so far yet to emerge. Meanwhile, European officials continue to work on countermeasures that could be deployed if the White House goes ahead with its 30% duties on the bloc’s goods. Autos giants Europe’s automakers have been reeling from the impact of U.S. tariffs, as well as tough competition from Chinese car brands and bumps on the road to full electrification. Trump imposed 25% tariffs on foreign-made vehicles and car parts in early April, taking the total charge on EU auto imports to 27.5%. Washington has recently threatened to raise the levy to 30% from next month. Germany’s Volkswagen on Friday said that increased U.S. tariffs added 1.3 billion euros ($1.53 billion) in costs over the first half of the year. The company, which reported a sharp drop in second-quarter operating profit, also lowered its full-year guidance. Jeep maker Stellantis had previously taken the surprise step of releasing preliminary figures ahead of its first-half earnings, saying it expects a loss of 2.3 billion euros. Stellantis, which owns household names including Dodge, Fiat, Chrysler and Peugeot, incurred an initial hit of 300 million euros in its first-half results due to net tariffs incurred, as well as planned production losses as part of its response plan. Sweden’s Volvo Cars also reported a sizable downturn in second-quarter operating profit as Trump’s tariffs took their toll. Puma Elsewhere, German sportswear giant Puma on Friday announced that it expected to post an operating loss for the financial year, noting that U.S. trade policies were dampening sales. Before fully factoring in the impact of tariffs and adjusting its outlook, Puma had been forecasting a full-year profit in the range of 445 million euros and 525 million euros ($522.6 million and $616.5 million). Remy Cointreau Although French drinks maker Remy Cointreau raised its full-year outlook when it reported on its earnings on Friday, it said it was now expecting to take a bigger hit from U.S. tariffs than previously anticipated. The company — which exports high-end cognac along with its various spirits brands including Cointreau and Mount Gay rum — said it expected to see a total net tariffs impact of 35 million euros in full-year 2025-26, versus the 25 million euros it had previously anticipated. Nokia On Tuesday, Nokia cut its comparable operating profit guidance range to 1.6 billion euros to 2.1 billion euros. It had previously expected the figure to fall in the range of 1.9 billion euros to 2.4 billion euros. “Since Nokia provided guidance in January for the full year 2025, two headwinds outside its control are impacting the 2025 outlook,” the company said in a late-Tuesday statement. “The largest headwind is currency fluctuations (particularly the weaker USD), an approximately EUR 230 million negative impact … Also, the current tariff landscape is expected to impact full year operating profit by EUR 50 million to EUR 80 million.” That represents a tariff hit of around $94 million. Guidance guessing game German truck maker Traton on Friday also cut its guidance on Friday, citing Trump’s tariffs regime as a key driver of slowing sales. “We are now anticipating a significant decline for the North American truck market,” the company said in its first-half earnings report. Traton said it now expected sales to decline by up to 10% in the current financial year, compared to its previously forecast fall of up to 5% or 5% growth. The revenue outlook was also lowered to a range between a 10% fall to flat growth, down from earlier guidance of a 5% decline to a 5% hike for the full year. The company noted that its guidance was based on “the tariff situation applicable at the end of the first half of the year.” “The forecast therefore does not factor in any effects of possible additional tariffs such as tariffs of 50% on Brazilian and 30% on EU imports,” Traton said. “There is therefore continued uncertainty about the future impact of the US trade policy.” Other companies could also soon be forced to reassess their guidance, after basing their outlooks for the year on an outcome in which Trump’s threatened 30% tariffs on the EU do not come to fruition — and the EU does not retaliate. French defense giant Thales , for example, is currently anticipating “a contained direct impact of tariffs” — but its outlook is based on a scenario of 10% tariffs being imposed on EU goods. Last week, an EU diplomat told CNBC that a 15% baseline tariff rate was currently the base-case situation being anticipated by officials. “The 2025 guidance assumes reciprocal tariffs of 10% from Europe and 25% from Mexico, and exclude any retaliatory measures that might be taken by Europe in this context,” Thales said in its second-quarter trading update this week, as it lifted its outlook under the assumption of “no new disruption in the macroeconomic and geopolitical contexts.” CNBC has reached out to Thales for comment. European exporters ‘shouldering the cost’ In a note to clients on Friday, Citi economists said they were seeing “tentative evidence that some European exporters are shouldering the cost of higher US tariffs, at least at this initial stage.” “Yet, we doubt this will lead to price hikes domestically in attempts to rebuild margins,” they said. “Other effects of tariffs remain disinflationary: data suggest imported disinflation from China is intensifying. And the impacts of the sizable and fast euro appreciation are mostly still in the pipeline.” The investment bank’s economists said they were now forecasting core goods inflation in the euro zone at 0% in 2026 “as a result of these effects.” — CNBC’s Karen Gilchrist and Silvia Amaro contributed to this article.
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