How European brands should respond to Trump's latest tariffs

He's at it again

There’s a real threat of new US import tariffs aimed at a group of European allies.

It’s surreal, but it’s not abstract. If you ship real volume into the US from Europe, you’ve got a commercial problem on your hands.

The mistake now is treating this like a politics story. For brand operators, it’s a unit economics story, a cash story, and a planning story.

Here’s the bit that matters. Trump has announced (threatened) a 10% tariff on all goods imported into the US from eight European NATO countries starting 1 February, with a move to 25 percent from 1 June.

Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. The stated condition is that the tariffs stay in place until a deal is reached for a total US purchase of Greenland.

If you’re waiting for this to make sense, don’t. Your job is to assume it’s operationally real until you see otherwise, because the start date is days away.

What’s actually at risk

A 10 percent duty can look manageable on a spreadsheet, especially if you’ve got room in gross margin or you can nudge pricing without destroying demand. The risk is the step-up, and the admin friction that comes with it.

A smaller tariff for a short window is a headache. A bigger tariff, if it sticks, is a strategic change for a lot of categories.

There’s a useful reality check from last year’s tariff drama. Trump imposing a 20 percent tariff and then dialling it back to 10 percent within hours, tells you everything you need to know about planning on vibes.

That volatility is a cost in its own right. It wrecks buying calendars, it makes pricing decisions feel temporary, and it pushes teams into constant re-forecasting.

Now go look at how you currently serve the US. If you’re relying on cross-border parcel shipping to keep inventory centralised, that model only behaves when the border is forgiving.

When tariffs tighten, the failure mode is never just the rate. It’s brokerage fees, clearance delays, bad customer experience, and finance teams trying to explain why the landed cost changed after the sale.

The other thing that catches people out is the customs value, not the retail price. If your structure means goods pick up internal markup before they hit US Customs, you can end up paying duty on value you didn’t intend to be taxable.

The genuine risk for EU brands isn’t one headline. It’s a multi-month squeeze on margin and demand, plus a structural push toward running the US like its own operating unit.

How to respond without losing your head

You don’t need to panic. You do need a plan, and you need to make decisions with dates in mind.

Treat the initial 10 percent as the opener, and plan like the 25 percent escalation happens. If it gets paused or watered down, fine. If it lands and you’re not ready, you’ll spend the spring firefighting instead of trading.

This week, do three things:

• Model landed cost for a 10 percent case and a 25 percent case by SKU and channel, including brokerage and likely clearance delays.

• Agree what happens to US pricing in each case, and be honest about where you’ll absorb margin versus pass it on.

• Decide whether you’re committing to a US operating model, or accepting that the US channel shrinks for a while.

That last decision is the one most teams dodge, because it feels dramatic. It’s also the one that stops you wasting time on half-measures.

Internally we’ve boiled it down pretty brutally in previous tariff rounds. For a lot of brands, it eventually becomes two options, turn off the US channel or open a US distribution set-up.

If the US matters, act like it matters. Split inventory properly, bulk import into US stock, and fulfil domestically through a 3PL or your own warehouse.

You’re not doing that to get cute with customs. You’re doing it because paying duty once on a planned inbound is operationally saner than paying it again and again on retail-facing parcels, with a customer-service mess bolted on.

If the US doesn’t matter, stop bleeding time and margin trying to keep it alive through clever shipping gymnastics. One internal anecdote from last year was a brand asking whether it could serve the US via Dubai to dodge duties, and being told straight that duties would kill profitability anyway.

There’s a middle ground, but it’s still work. Keep hero lines flowing, pause long-tail SKUs that become unviable in the 25 percent scenario, and make the channel smaller on purpose rather than by accident.

The levers big players will pull and what you can copy

Some of the big groups will use legal and structural levers that smaller brands just can’t justify. That doesn’t mean you’re stuck, but it does mean you should be realistic about complexity.

One example is the US First Sale rule. Reuters reporting last year said companies including L’Oréal, Moncler and Ferragamo were exploring it to reduce the dutiable value.

The upside is obvious if you can do it cleanly. The downside is also obvious, it’s paperwork-heavy, it comes with audit risk, and it only works if your supply chain and documentation discipline are tight.

If you can’t do that safely, don’t. Do the basics well instead.

Get your HS code assignments checked. Get crystal clear on importer of record by channel, and don’t let wholesale and DTC quietly run on different assumptions.

If you sell direct, fix the customer experience before the chargebacks arrive. Make sure checkout doesn’t surprise customers with fees you already knew were coming, and prep customer-service scripts for why delivery timelines and costs may change.

If you sell wholesale, start the conversation now on who wears the tariff, because someone will. Leaving it until after the goods are on the water is how relationships get wrecked.

And watch competitors, not just politicians. Fortune’s AP reporting highlighted Campari thinking about holding US prices steady if competitors raise theirs, to grab share. That’s the game that starts when tariffs hit, and it’s why you need your numbers per SKU, not just in aggregate.

The bit nobody wants to admit

This isn’t just about Greenland. It’s another reminder that geopolitics is now a direct input into your P&L.

Bruegel estimated that tariffs in the 10 to 25 percent range could shave around 0.3 percent off EU GDP and 0.7 percent off US GDP. You don’t need to be a macro nerd to translate that into your world, it means weaker demand, more noise, and less patience from boards.

Treat this like a drill. The brands that win aren’t the ones with the cleverest statement, they’re the ones that can rework their operating model quickly and keep serving customers without chaos.

If you do the unsexy work now, SKU exposure, landed cost, fulfilment split, you’ll be calmer when the next policy lands. And if this one gets delayed or watered down, you haven’t wasted time. You’ve just tightened the part of your business that was going to get stress-tested anyway.