US Tariffs Affecting EU Trade Relations; GM Faces Quarter Losses
US tariffs loom over EU trade, impacting Swedish interests and GM's profits.
Key Points
- • Trump threatens 30% tariffs on EU goods by August 1
- • EU considers €93 billion in retaliatory tariffs
- • GM reports a $1.1 billion profit decline due to tariffs
- • Swedish Trade Minister emphasizes US decision crucial
The trade conflict between the United States and the European Union escalates as US President Donald Trump threatens to impose a 30% tariff on EU goods, prompting significant concerns among European officials, particularly in Sweden. As the deadline for negotiations approaches on August 1, 2025, Swedish Trade Minister Benjamin Dousa acknowledges that the fate of these discussions largely lies with the US administration, stating, "the ball is very much on the other side of the Atlantic now."
Dousa emphasized that while the EU had previously voiced willingness to accept a 10% tariff with some sectoral exemptions, such as in pharmaceuticals and alcohol, the US's current demands for tariffs between 15-20% are considered unacceptable by EU representatives. In response, the European Commission is formulating countermeasures that could involve tariffs amounting to €93 billion on various products if the new US tariffs take effect.
For Swedish industries, the situation remains tense. Fortunately for Sweden, Dousa confirmed that five critical products vital for Swedish research and innovation have been removed from these potential tariff lists. He did not disclose the specifics of these products due to their sensitive nature. Furthermore, the Swedish government is advocating a strategy to lower tariffs on products from other countries should the EU move forward with higher tariffs on the US, potentially including adjustments to tariffs on nations like China.
On a related note, the impact of these tariffs is already felt domestically. General Motors (GM) reported a staggering profit decline in its Q2 financial results almost entirely attributable to these tariff pressures. The company saw an adjusted earnings drop of $1.1 billion, with operating income plunging by 32% year-on-year to $3.0 billion. Additionally, GM's vehicle sales fell 6.6% to 974,000 units. Despite these setbacks, GM maintains its 2025 full-year operating income forecast at a markedly lowered estimate of $10 to $12.5 billion, down from earlier predictions of $15.7 billion. Following the earnings report, GM shares fell over 4% in pre-market trading, reflecting investor concerns over the ongoing tariff implications.
As the situation develops, both Swedish officials and major companies like GM brace for continued uncertainty as they navigate the complexities of these US-EU trade relations.