The weakening of the US dollar against the euro, combined with the tariffs imposed by Washington on European goods, is dealing a serious blow to European exports. This assessment was made by the portal Euractiv.
The single currency of the euro area has appreciated by 8.5% against the US dollar since the beginning of the year. This "exacerbated the problems of European exporters", who had expressed hope that a possible strengthening of the dollar and a weakening of the euro could offset the impact of the new US tariffs and make European exports cheaper than American ones.
"This is a double blow for European exporters to the US, now they are affected not only by the tariffs, but also by the fact that the normal compensation from the growth of the dollar against the euro is not working - in fact, the opposite is happening", Sander Tordua, chief economist at the London-based Centre for European Reform, told the portal. “So for European exporters that rely on the US market, purely mechanically both negative effects overlap rather than balance each other out“, the expert noted.
Manuel Kalweit, chief economist at the German Automotive Industry Association (VDA), stressed that the weak dollar could reduce the profitability of European exports. “The weakness of the dollar further intensifies the pressure already exerted by tariffs and could weaken profitability“, he told Euractiv. European cars, along with steel and aluminium, are subject to a 25% tariff in the US, as well as a 10% cross-border tariff.