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Trump’s Tariff Threats Could Hit Europe’s Key Sectors

In 2023, Europe exported $502 billion worth of goods to the US, with projections indicating this will grow to nearly $606 billion in 2024. However, if Donald Trump’s tariff threats are realized, European exports could face substantial challenges. The biggest risks will affect the healthcare, industrials, and consumer staples sectors, which are expected to contribute over half of the Stoxx Europe 600’s earnings growth this year.

Pharmaceuticals And Automakers Face Major Risks

Pharmaceutical companies are particularly exposed. For instance, Novo Nordisk generates 58% of its revenue from the US, while Sanofi generates almost 50%. The automotive and semiconductor industries will also be heavily impacted. Automakers, who account for 10% of European exports to the US, could suffer from the new 25% tariffs on imports from Mexico and Canada, scheduled to take effect on March 6. Companies like Stellantis, Volkswagen, BMW, and Mercedes-Benz could face a €6 billion ($6.3 billion) hit in operating profits. Volkswagen, for example, relies on Mexico for 65% of its US-bound cars, potentially forcing the company to either ramp up US production or exit the market entirely.

Industrial Sector At A Disadvantage

The industrial sector is also at risk, especially for companies relying on global supply chains. Further tariffs on machinery and equipment could add to the challenges facing European exporters. A 10% to 20% tariff on pharmaceuticals, cars, machinery, and alcoholic beverages could reduce sales by 1.1% to 2.1% and operating profits by 3.3% to 6.6%, according to Bloomberg Intelligence.

Premium Carmakers Could Weather The Storm

Some premium carmakers, like BMW and Mercedes-Benz, may be better positioned to absorb the additional costs, as their customer base tends to accept price increases. However, many sectors will still face significant strain.

A History Of Negotiations With Trump’s Administration

Europe’s experience with Trump’s trade policies is not new. In 2018, the EU avoided new tariffs through negotiations that included commitments to import more US liquefied natural gas. This experience has helped large industrial companies localize their supply chains to better withstand future challenges. But, with the potential for tariffs in 2025, the outlook remains uncertain. According to Goldman Sachs, S&P 500 companies could see a 2% to 3% drop in earnings per share if tariffs are imposed. This would either reduce profit margins or lead to declining sales as companies pass on the costs to customers.

Strained Household Finances: Eurostat Data Reveals Persistent Payment Delays Across Europe and in Cyprus

Improved Financial Resilience Amid Ongoing Strains

Over the past decade, Cypriot households have significantly increased their ability to manage debts—not only bank loans but also rent and utility bills. However, recent Eurostat data indicates that Cyprus continues to lag behind the European average when it comes to covering financial obligations on time.

Household Coping Strategies and the Limits of Payment Flexibility

While many families are managing their fixed expenses with relative ease, one in three Cypriots struggles to cover unexpected costs. This delicate balancing act highlights how routine payments such as mortgage installments, rent, and utility bills are met, but precariously so, with little room for unplanned financial shocks.

Breaking Down Payment Delays Across the European Union

Eurostat reports that nearly 9.2% of the EU population experienced delays with their housing loans, rent, utility bills, or installment payments in 2024. The situation is more acute among vulnerable groups: 17.2% of individuals in single-parent households with dependent children and 16.6% in households with two adults managing three or more dependents faced payment delays. In every EU nation, single-parent households exhibited higher delay rates compared to the overall population.

Cyprus in the Crosshairs: High Rates of Financial Delays

Although Cyprus recorded a notable 19.1 percentage point improvement from 2015 to 2024 in delays related to mortgages, rent, and utility bills, the island nation still ranks among the top five countries with the highest delay rates. As of 2024, 12.5% of the Cypriot population had outstanding housing loans or rent and overdue utility bills. In contrast, Greece tops the list with 42.8%, followed by Bulgaria (18.7%), Romania (15.3%), Spain (14.2%), and other EU members. Notably, 19 out of 27 EU countries reported delay rates below 10%, with Czech Republic (3.4%) and Netherlands (3.9%) leading the pack.

Selective Improvements and Emerging Concerns

Between 2015 and 2024, the overall EU population saw a 2.6 percentage point decline in payment delays. Despite this, certain countries experienced increases: Luxembourg (+3.3 percentage points), Spain (+2.5 percentage points), and Germany (+2.0 percentage points) saw a rise in payment delays, reflecting underlying economic pressures that continue to challenge financial stability.

Economic Insecurity and the Unprepared for Emergencies

Another critical indicator explored by Eurostat is the prevalence of economic insecurity—the proportion of the population unable to handle unexpected financial expenses. In 2024, 30% of the EU population reported being unable to cover unforeseen costs, a modest improvement of 1.2 percentage points from 2023 and a significant 7.4 percentage point drop compared to a decade ago. In Cyprus, while 34.8% still report difficulty handling emergencies, this marks a drastic improvement from 2015, when the figure stood at 60.5%.

A Broader EU Perspective

Importantly, no EU country in 2024 had more than half of its population facing economic insecurity—a notable improvement from 2015, when over 50% of the population in nine countries reported such challenges. These figures underscore both progress and persistent vulnerabilities within European households, urging policymakers to consider targeted measures for enhancing financial resilience.

For further insights and detailed analysis, refer to the original reports on Philenews and Housing Loans.

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