Workers walk past manufacturing equipment at Eli Lilly & Co. manufacturing plant in Kinsale, Ireland, on Sept. 12, 2024. Lilly has been bulking up its production capacity since 2020, investing more than $17 billion into developing new plants and expanding existing facilities for the weight-loss and diabetes drugs that are expected to become some of the best-selling medicines of all time.
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The U.S. imported roughly $600 billion worth of goods from European Union member states in 2024, and as President Trump prepares to potentially extend his tariffs beyond metals to a wide range of products from allies, some product categories would be hit much harder than others in the latest “reciprocal” trade war move by the U.S. government.
The top U.S. import from the EU in 2024, by category and dollar value, was pharmaceutical products, according to data from the U.S. Trade Census analyzed by ImportGenius. Included in that $127 billion worth of EU imports was semaglutide, an ingredient used in the popular GLP-1 weight loss drugs from Novo Nordisk, Ozempic and Wegovy. The GLP-1 compound was the sixth-largest import from the EU to the U.S., at $15.6 billion.
The drug and medical industry, overall, will experience among the most significant tariff impacts by sector. Surgical and medical instruments imports were valued at $37 billion; medical devices, which span CRT Machines, respirators, orthopedic devices, and surgical equipment, tallied $22 billion. Vaccines, hearing aids ($1.3 billion) and artificial joints ($2.5 billion) were also among top imports in 2024.
Drug giants including Eli Lilly, which has a major presence in Ireland — where its GLP-1 drugs that use the compound tirzepatide, including Mounjaro and Zepbound, are manufactured — and Novo Nordisk, which is based in Denmark, have been increasing their manufacturing footprint in the U.S. due to demand for weight-loss drugs, with Lilly investing billions in new facilities, including R&D facilities near its corporate headquarters in Indiana, and Novo Nordisk investing in North Carolina.
Trump said Sunday that he planned to slap reciprocal tariffs on “every country” that imposes import duties on the U.S. “Very simply it’s if they charge us, we charge them,” he said on Air Force One, NBC News reported.
President Trump’s action for now is only issuing a presidential memorandum on the tariffs, and CNBC learned on Thursday that the tariffs would likely not go into effect for at least a few months. The White House said on Thursday that tariffs could be levied in response to VAT taxes, which are used in the EU, Canada, Mexico and many other countries, or devalued currencies. Sending merchandise through another country to avoid tariffs will lead to reciprocal tariffs as well.
Among products the White House cited in a fact sheet as unfair in trade and tax practice are shellfish and autos between the U.S. and EU; ethanol between the U.S. and Brazil; and trade in motorcycles between the U.S. and India. The White House also mentioned the digital services tax that many nations charge U.S. tech companies, as Trump’s aggressive stance on international economic relationships grows to cover a wider range of corporate tax threats.
Exemptions for various industries such as pharmaceuticals or autos might be considered, according to previous reporting including comments from House Speaker Mike Johnson to Reuters, but Trump said in Oval Office comments to the press on Thursday that there will be no exemptions for any tariffs put in place. Trump indicated on Thursday that auto import tariffs are on the way, too, according to a Reuters report.
Still, whether Trump will follow through on these tariffs, on which countries and in which product categories, remains uncertain. “I’ve decided for purposes of fairness that I will charge a reciprocal tariff,” Trump said in the Oval Office on Thursday. “It’s fair to all. No other country can complain.”
Howard Lutnick, Trump’s nominee for Commerce secretary, will lead studies to be completed by April 1 on the tariffs plan.
Trade experts say a reciprocal trade war is easier said than done.
“Declaring reciprocal tariffs will not be easy,” said Josh Teitelbaum, senior counsel of Akin, who helped craft the Trans-Pacific Partnership trade deal. “It would be a logistical nightmare to identify gaps in tariff rates across products in multiple counties. More research needs to be done in order to carry out something of that magnitude.“
There are several examples of U.S. exports tariffed by the EU. US apparel, accessories, cotton, and t-shirts are subjected to a 12% tariff. The EU also charges a 10% tariff on U.S. vehicles while the U.S. levies a 2.5 percent tariff on European cars, and a 25% tariff on all imports of light trucks.
According to Trade Partnership Worldwide’s analysis of the approximate value of the new EU tariffs, businesses in the United States will pay a price tag of around $2.9 billion per week, or $409.5 million per day, with the drug industry taking the biggest hit.
“Nationally, about a quarter of all EU imports are pharmaceuticals,” said Dan Anthony, president of Trade Partnership Worldwide. “For pharmaceuticals alone, businesses nationwide will be paying $100 million/day in new potential tariffs.”
Teva Pharmaceuticals, the world’s largest manufacturer of generic drugs, is also among the top importers from Europe in the pharma space.
U.S. states will feel the pinch to varying degrees, with the top-state paying EU tariffs, according to the Trade Partnership Worldwide analysis, being Indiana, the corporate headquarters of Eli Lilly. Medical equipment and pharmaceuticals account for more than 75% of the potential new tariffs paid by companies in Indiana.
The state of New Jersey also has significant exposure, spread across passenger vehicles (15%), petroleum products (11%), pharmaceuticals (8%), personal care products, like perfumes and makeup (6%), and medical devices (5%).
Overall, makeup and perfume imports to the U.S. from the EU reached $12.4 billion in 2024.
North Carolina ranks No. 3 in the nation, with pharmaceuticals accounting for more than 44% of the state’s imports.
U.S. has collected $264 billion in tariff duties under Trump, Biden
The impact of the tariffs will be felt by the businesses that import EU products in for their business. Companies have been dealing with higher tariff bills for years, with more than double the level of tariffs collected during the Biden administration than during Trump’s first term.
U.S. trade war tariffs have generated more than $264 billion of higher customs duties collected for the U.S. government from importers, as of the end of last year, according to analytics and analysis from the Tax Foundation.
Out of that total, $89 billion (34%) was collected during the Trump administration. The remaining $175 billion (64%) was collected during Biden’s term.
Currently, the national tariffs bill to the business world is $78 billion, based on the 2024 data from Trade Partnership Worldwide. That could rise to over $400 billion if all of Trump’s new and threatened tariffs, from steel and aluminum, to Mexico, Canada, China and the EU, are enacted. Overall, companies in the U.S. will pay $43 billion relating to tariffs imposed by Trump on China using powers under the International Emergency Economic Powers Act of the executive branch, and another $11 billion in steel-aluminum tariffs. The IEEPA tariffs bill related to Canadian imports is $103 billion; while it’s $126 billion for Mexican trade; and $149 billion for EU products, according to data provided by Trade Partnership Worldwide.
Peter Boockvar, chief investment officer of Bleakley Financial Group, said while understands the desire to push back against countries that tariff U.S. products more than we tariff their goods, the trade war needs to be short-term, not long-term in nature.
“If we’re doing it to raise money and to protect U.S. industries, there will be more losers than winners on the business side and consumers will be left paying more for things,” said Boockvar. “Yes, higher tariffs can be just a one-time step up in pricing, but the last thing consumers need after a 20%+ cumulative rise in their cost of living over the past few years, is another increase.”
The latest U.S. consumer inflation data for the month of January showed a larger than expected rise, another sign among many that the recent progress the Federal Reserve had made in bringing inflation back down closer to its 2% target has stalled out, though wholesale inflation numbers this week were slightly more encouraging.
From Ikea to industrials to luxury buyers
From an overall perspective, including freight forwarders who move a large portion of trade on behalf of companies, Ikea appears to be the top U.S. consignee of EU shipments. Wine and spirits logistics company Hillebrand (part of DHL), and Amazon, are among the top ranked U.S. companies importing from the EU.
Outside of pharmaceuticals, machinery and mechanical parts ($89.8 billion), vehicles ($60.3 billion) and electrical machinery and parts ($39.2 billion), are top EU import categories. In autos, that includes Mercedes, Michelin, Ford, Volvo, Volkswagen, and BMW.
A review of the Bills of Lading, which detail the items inside import containers, show a much more expansive list of products, from imports for Bosch and John Deere, to tiles from Ireland and Spain, lithium-ion batteries from Poland, BMW-specific lithium-ion batteries, truck seats, Irish Whiskey, Goya Foods imports from Spain, wind turbines and spare parts from Denmark (where renewable energy giant Vestas Systems is based), steel pipes, and scaffolding.
The luxury consumer, and collector, will face a bigger bill, too.
“You have $9.4 billion in precious metals, stones, and pearls being imported from the EU,” said William George, director of research for ImportGenius. “For the luxury investor, $5.5 billion in works of art, collector’s pieces, and antiques were imported last year.”
Paintings topped this category at $4 billion, followed by sculptures, at $800 million. Leather handbag imports were valued at around $2.5 billion.
Americans enjoying their bubbly from sparkling water to Moet Hennessy may also see an increase in their favorite beverage.
Sparkling water from four major brands (Evian, Perrier, Pelligrino, and Gerolstiner) shows an average of 2400 twenty-foot equivalent units (TEUs) a month, year-over-year.
Overall, wine imports were $5.5 billion in 2024, according to George. “That’s around 14,000 containers a month from EU countries. Almost half a container vessel.”
Grape-based brandies (cognac, armagnac) topped the spirits category at $1.3 billion. Vodka was second at $1.1 billion. Sparkling wine was $1.7 billion. Extra virgin olive oil imports from the EU were a $1.8 billion industry in 2024.
Imports represent 15 percent of GDP, according to Larry Lindsey, CEO of the Lindsey Group. “If we pay the whole thing (which we most definitely will not) a 10 percent tariff on everything would be about 1.5 percent of GDP. My back of the envelope says we will pay about 0.9 percent of GDP,” he said.
But in his view, the impact of not maintaining the current tax rates and rules would be two to three times as large due to behavioral effects.
“Right now, our deal maker is picking the low-hanging fruit and building momentum to establish that he is unstoppable. It is working. The end game is going to be a 10 percent tariff on everybody with a unified much higher rate on China. That is going to take care of the [transferring of cargo] problem of Chinese goods.”
India is also being targeted by the latest tariffs. While President Trump has cited the example of Harley-Davidson motorcycles in threatening India for retaliation based on its own trade duties on foreign products — an issue India has already responded to directly as India Prime Minister Narendra Modi comes to the White House on Thursday — there are many categories of products from the key emerging markets trade partner that the U.S. market and businesses rely on.
“India has more tariffs than nearly any other country,” Trump said in the Oval Office on Thursday.
According to Trade Partnership Worldwide’s database, potential new steel/aluminum tariffs on India could reach $190 million, based on 2024 import levels. The U.S. company most-exposed to reciprocal tariffs is Walmart, which represented 62% of all imports from India to the U.S. in 2024. Other imports include items for IKEA; the antibiotic doxycycline; shafts for Kawasaki; Lockheed Martin aircraft structural parts; aluminum castings; McCormick spices like celery seeds and cumin seeds; parts and accessories for transportation company International (formerly Navistar); hundreds of items destined for retailers, from T.J. Maxx to Ralph Lauren; and imports for Schneider Electric.
Correction: The top-state paying for EU tariffs if enacted on all industries would be Indiana, according to a Trade Partnership Worldwide analysis. An earlier version of this article misstated the source of the tariffs data. Eli Lilly GLP-1 drugs Mounjaro and Zepbound use a compound called tirzepatide. An earlier version of this article misstated that fact.