US Tariffs come into effect: what It means for the Netherlands
Starting today, US tariffs on European goods come into effect, significantly impacting global trade.
Published on August 7, 2025
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US tariffs imposed by President Trump come into effect on 90 countries today, with most European products now having a 15% levy. This is expected to lead to higher consumer prices and pressure on Dutch companies that rely on the US market. The broader US-China trade war is also taking a toll, with forecasts of reduced economic growth in the Netherlands and risks of recession. However, the Dutch government is exploring options to diversify trade relationships beyond the US and Europe, eyeing markets in Southeast Asia, South America, and Africa.
As of today, Americans will face higher prices on a wide array of European goods, as the US tariffs have officially taken effect. These tariffs, ranging from 10% to 50%, are designed to encourage Americans to buy domestically produced goods and incentivize foreign companies to relocate their factories to the United States. Most products from the EU now face a 15% tariff, while steel and aluminum products will be hit with a steep 50% tariff. The pinch is expected to be felt by both consumers and businesses, as many companies are likely to pass on these higher costs.
Dutch companies feel the squeeze
For the Netherlands, these tariffs pose a significant challenge. Dutch companies that heavily rely on exporting to the US will face increased costs, potentially impacting their competitiveness. Tata Steel, which has operations in the Netherlands, is already anticipating the impact of the higher steel tariffs and is actively seeking to reduce its dependence on the US market by exploring opportunities in the Middle East and Latin America. Philips, another Dutch tech giant, expects €150-200 million less in profits this year due to import tariffs.
The US tariffs are just one facet of a larger trade war, primarily between the US and China, that is projected to have far-reaching consequences. In April, Rabobank modeled several scenarios to quantify the impact, and their analysis suggests that the trade war could reduce global economic growth to 2.2% in 2025 and global trade by 0.2%. For the Netherlands, the baseline scenario forecasts economic growth to slow to 1.3% in 2025 (down from 1.7%) and further to 0.6% in 2026 (down from 1.2%), raising concerns about a potential recession. The long-term economic damage to the Netherlands is estimated to be over €7 billion annually by 2030, which translates to nearly €400 per Dutch citizen.
EU's vulnerability and the search for alternatives
The EU, including the Netherlands, is particularly vulnerable in this trade war due to its dependence on US defense provisions and energy imports. With the US proving to be a less reliable trade partner, the Netherlands is exploring alternative markets. Professor André van Hoorn from Radboud University Nijmegen suggests reorienting towards Southeast Asia, South America, and Africa. While over 54% of the Netherlands' exports currently go to its top five trading partners—Germany, Belgium, France, the UK, and the US—diversification could provide a buffer against future trade disruptions.
