US President Donald Trump’s Liberation Day tariffs on European imports – set at 20% for EU member states and 10% for the UK – are poised to curtail revenue and profitability growth across several corporate sectors in Europe, according to a note published by Fitch Ratings on April 7.

The agency stated that sector-specific impacts will depend on trade exposure and intensifying global competition, while broader economic repercussions are expected to follow from a slowdown in economic growth.

Fitch Ratings identified the chemical, automotive and technology hardware sectors as particularly vulnerable. “The chemical industry has a large trade surplus with the US and will potentially face greater competition in global markets, as its imports into the US are skewed towards specialty chemicals,” the note read. The agency added that oversupply in the market, combined with sluggish economic growth in the US, Europe and China, will prolong adverse trading conditions.

Automotive manufacturers in Europe are also at risk. “European automotive manufacturers face increased supply-chain risk due to reliance on supplies from Mexico and Canada… as well as Europe for their US sales,” Fitch Ratings noted, highlighting that tariffs could compound the effects of reduced global demand.

Technology hardware producers, particularly telecom equipment makers, may encounter “higher costs to localise a larger share of production within the US,” according to the agency. This supply-chain realignment would add to existing inflationary pressures within manufacturing operations.

Alcohol producers, especially exporters to the US, face short-term problems. “Revenue and profits may come under temporary pressure… sales volumes of imported alcohol in the mass and mid-price markets are likely to decline,” Fitch Ratings said. The agency anticipates price increases in the US to offset tariff impacts, though consumer downtrading and a shift to locally produced beverages could mitigate their effectiveness.

Broader economic weakening and elevated food prices are expected to depress consumer discretionary spending, affecting sectors reliant on non-essential goods and services. “This can reduce revenue for hotels and restaurants, as well as for manufacturers and retailers of non-essential goods,” the note said. Transatlantic airlines may also see reduced demand due to lower purchasing power in both regions.

While many diversified European industrial firms maintain significant US manufacturing operations, “exports are still sizeable and will be affected by the tariffs,” Fitch Ratings warned. Competition from Chinese manufacturers in non-US markets and deferred capital expenditure decisions amid slowing growth may further strain performance.

Healthcare corporates could also suffer, particularly in the US market where “a large part of healthcare costs are borne by consumers,” and where tariff-related barriers may affect access to intermediate medical products. Pharmaceuticals, temporarily exempt from the new tariffs, remain under threat of inclusion pending outcomes of the ongoing Section 232 investigation under the US Trade Expansion Act.

The outlook for the metals and mining sector is similarly dim, with “deteriorating global economic growth prospects and greater competition in non-US markets.” Meanwhile, oil and gas producers may experience downward pressure on prices due to demand-side weakness, although Fitch Ratings expects the OPEC+ alliance to continue supply management efforts.