The tariff shock has arrived, with European exports to the U.S. plummeting, and automotive exports dropping by 35%, and this is just the beginning…

The impact of the United States imposing tariffs on European goods is becoming evident.

According to the news from the Chasing Wind Trading Desk, a recent report from Deutsche Bank shows that in June, U.S. imports from Europe saw a significant decline for the first time, dropping from $56.6 billion in May to $45.2 billion, the lowest level since February 2024.

The automotive industry has been hit the hardest. Due to the 25% additional tariff, European exports of cars to the U.S. plummeted by 36% year-on-year in June.

Deutsche Bank warned in the report that the observed decline is still moderate compared to model predictions, and more severe impacts have yet to come. With the "reciprocal tariffs" officially taking effect on August 7, and the fading "rush to export" effect, the downward trend in European exports to the U.S. is expected to accelerate.

Automotive Industry Hit Hardest

Data from the report shows that European exports of cars to the U.S. fell sharply by 36% year-on-year in June, making it the industry most affected by the tariffs.

In addition to the automotive industry, several other sectors are also feeling the chill. Exports of other transportation equipment and chemicals recorded year-on-year declines of 30% and 19%, respectively.

Some industries that appear to remain resilient, such as basic metals and agricultural products, owe their stable performance mainly to the exemption from tariffs on most products. The report pointed out that among these industries, goods subject to "reciprocal tariffs" saw a "significant decline" in exports to the U.S. ranging from 7% to 18% during the same period.

The report also stated that the monthly decline in overall export value in June can be attributed to the "normalization" of exports of goods exempt from tariffs, primarily pharmaceuticals. Previously, due to the anticipation of tariffs in April, pharmaceuticals experienced a surge in exports in March, and the early release of demand has also exacerbated the decline in June's data.

Greater Impact Yet to Come

Although the data for June already reflects initial negative impacts, Deutsche Bank's analytical model shows that this is still "relatively mild" compared to the overall losses that tariffs could cause.

First, the burden of tariffs is increasing. According to CCTV News, the tariff executive order signed by U.S. President Trump took effect on the 7th, imposing tariffs on dozens of trading partners.

According to Deutsche Bank's calculations, since August 1, the average tariff rate imposed by the U.S. on exported goods from Europe has risen from 12% in June to 16%. The report states that the current general tariff rate of 15% is more destructive than the 10% rate during the "window period" when tariffs were suspended from April to July.

Second, the negative impacts on certain industries have a lagging effect. Taking pharmaceuticals as an example, although the monthly export value has significantly declined due to the fading of the "rush to export," the year-on-year decline is only 3%. Analysts expect that as previous inventories are consumed and future tariffs may increase further, some pharmaceutical exports will become "unfeasible," leading to an accelerated decline in exports in this sector.

Additionally, in several important categories such as processed metal products, electrical equipment, and rubber/plastic products, demand has not shown a significant decline, and export values are even still growing year-on-year The report states that unless European exporters are seizing market share in the United States (which is obviously unlikely), these growth figures appear "strange," indicating that future adjustments are inevitable.