The new US-EU trade framework, centered on automotive tariffs, is creating significant ripple effects across a host of other industries, from Swiss chocolate to American whiskey. The deal’s narrow focus and the establishment of a new 15% baseline tariff are forcing businesses to make drastic decisions and leaving many sectors feeling left behind.
One major ripple effect is the trend of “onshoring.” To avoid tariffs, Swiss companies like chocolate maker Lindt and knife producer Victorinox are moving production to the US. This demonstrates that even for non-EU countries, the trade friction is so significant that relocating manufacturing becomes a viable business strategy, potentially shifting jobs away from Europe.
Another effect is the collateral damage to industries not central to the negotiations. Both the European wine and American spirits industries are decrying the deal. French vintners are “hugely disappointed” by the 15% US tariff, while the US Distilled Spirits Council predicts a $1 billion loss and 12,000 job cuts from the tariff on EU spirits, showing that the pain is felt on both sides of the Atlantic.
The deal illustrates that in modern trade negotiations, resolving one major dispute can inadvertently create new problems or solidify existing ones for other sectors. While German automakers may breathe a sigh of relief, the framework establishes a new, more protectionist transatlantic marketplace that will reshape supply chains and business models for years to come.
