The escalating US tariff dispute may force European companies to search for a “safe harbor,” potentially driving new investment and even relocating production to countries with more stable trade relationships with the United States. The current climate of uncertainty is a powerful incentive to look for calmer waters.
For a European company that relies heavily on the US market, the “rolling list” of derivative products represents a major political risk. Building a new factory or expanding an existing one in the EU to serve the US market is now a gamble. At any point, a new tariff could make that investment unprofitable.
This could lead to a strategic shift. A German automotive company, for example, might choose to expand its production capacity in Mexico or Canada, which are part of the USMCA trade bloc, rather than in Germany. This would allow it to serve the US market without facing the same tariff risk.
Similarly, a manufacturer of wind turbines might find it more advantageous to set up assembly plants within the US itself, to bypass the tariffs entirely. While this creates American jobs, it represents a loss of investment and employment for the EU.
If this trend accelerates, it could lead to a long-term hollowing out of specific export-oriented sectors in Europe. The search for a safe harbor from the storm of US tariffs could redraw the map of global manufacturing, to the EU’s detriment.
