Tariffs: EU risks losing between 135,000 and 450,000 jobs due to agreement with Trump

Brussels –  The agreement  on tariffs between the European Union and the United States has the advantage of restoring predictability, but it will not be a painless deal. On the contrary, with 15% tariffs on goods sold across the Atlantic, between 135,000 and 450,000 jobs in member states would be at risk. This is what emerges from the  European Commission’s annual report on labour market developments, which devotes a separate paragraph to the tariff issue, containing an estimate of what is expected in Brussels. 

The studies conducted by the services of the EU executive predict that the wholesale sector will suffer the most significant job losses ever, with up to 24 thousand lost, followed by the machinery and equipment sector (20 thousand), the retail trade (17 thousand) and the automotive industry (12 thousand). The bulk of the employment fallout is concentrated here, even though the situation is not homogeneous; all sectors are likely to be affected, but the impact is disproportionately between countries. 

Looking at the country system type, the European Commission notes that the pharmaceutical sector is particularly exposed in Ireland, Denmark, Slovenia, Finland, Austria, and Germany, with possible employment declines of up to 2.6 per cent, 2.5 per cent, 2.4 per cent, 1.5 per cent and 1.4 per cent, respectively. Air transport would be disproportionately affected by US duties in Denmark and the Netherlands, with job losses of 2 per cent and 1.3 per cent. Furthermore, in the production of computers, electronic and optical products, Estonia (-2.3 per cent) would suffer the most in terms of employment. 

The situation does not seem to bode well for Ireland, where several sectors are expected to experience significant employment declines, such as furniture (-2.9 per cent), basic metals (-2.3 per cent), machinery and equipment (-1.6 per cent), IT and information (1.6 per cent), fabricated metal products (-1.5 per cent), and paper products (-1.4 per cent).

In general, however, the EU may lose up to 0.8 per cent of its currently active workforce if exports were to completely stop, which is nevertheless considered “unlikely”. Brussels estimates, however, that on average each member state may lose between 0.1 and 0.3 per cent of employment as a result of the tariff agreement. In percentage terms, the pharmaceutical sector is expected to register the most significant relative employment decline of up to 1.3 per cent, followed by the chemical and machinery and equipment sectors, with declines of 1 per cent and 0.9 per cent respectively. 

The EU Member States potentially exposed to the greatest employment declines include Ireland, Germany, Denmark, and Slovakia. This is because these countries “have high levels of both direct exports and indirect integration in the transatlantic value chain, which makes them more vulnerable to trade shocks.” In terms of the potential negative impact on employment, Italy is the seventh most exposed EU country. 

In this context, according to the European Commission, “the strengthening of the single market for services, in particular by facilitating the provision of cross-border services and enhancing competition, can be crucial to stimulate productivity growth.” The recommendation applies to all..