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What Trump’s Tariffs Mean for European Manufacturing Leadership
23 Apr, 20256 Minutes
European manufacturing leadership is facing a new wave of uncertainty due to Donald Trump proposing a 10% tax on all imports and a 145% tariff specifically on Chinese goods. While these tariffs are aimed at boosting U.S. manufacturing, the knock-on effects will be felt around the world.
For European businesses, the biggest challenges may not come from tariffs directly, but from the second-order impacts such as disrupted supply chains, shifting trade dynamics, and increased pressure on operations. This means forward-thinking companies must rethink how they structure and support their leadership teams.
As global trade becomes more regional and less predictable, manufacturers need adaptable executives who can guide their teams through disruption and turn uncertainty into opportunity.
In this article, we explore how Trump’s tariffs are reshaping the global manufacturing landscape, the specific challenges facing European manufacturing leadership, and the steps businesses can take to stay competitive despite trade disruption.
Contact CSG Talent for help identifying and attracting skilled manufacturing leadership talent.
An Overview of Trump’s Tariffs
Trump’s latest tariff proposal builds on his previous trade policies, but this time the approach is more extreme. Alongside a blanket 10% tariff on all imports that is set to increase in some countries in July, there’s a much steeper 145% tariff on goods from China that aims to combat Chinese trade dominance and protect U.S. manufacturers. 
This reflects the previous set of tariffs that were imposed on steel, aluminium, and other common Chinese products. Back then, businesses were forced to rethink their supply chains and adapt their global strategies by switching to local production and finding new suppliers.
This caused increased prices for Americans, with the price of one metric tonne of hot-rolled band steel in December 2021 costing $1,855 in the US compared to $646 in China and $1,031 in Europe. For leaders in European manufacturing, those years showed how important it is to be adaptable and quickly make strategic decisions.
The main difference today is the environment. The global economy is already under pressure from inflation, geopolitical issues, and supply chain challenges. The recent implementation of these tariffs has exaggerated the issue, making it even more crucial for companies to re-evaluate their leadership structures and recruitment strategies.
Because of this, modern businesses need agile executives who understand the dynamics of international trade, know how to build resilient supply chains, and can lead teams through complex change. For European manufacturers, success depends on finding the right leadership to drive growth.
The Impacts of Trump’s Tariffs on European Manufacturing Leadership
Increased Production Costs
Trump’s increased tariffs result in an immediate rise in production costs for European companies as they severely disrupt global supply chains. This increases the price of raw materials and services that companies rely on, reducing overall profit margins. This creates a double-edged sword for businesses, as it will force them to either accept the additional costs, which will reduce their profits, or pass them on to consumers by increasing prices, which will affect their competitiveness.
Financial Pressure
The financial effects of these tariffs increase the need for companies to review and adjust their pricing strategies and production budgets almost immediately. When export costs rise, leadership teams must quickly decide how to minimise losses, and tough decisions must be made at the executive level. Boards and senior managers may be forced to tighten budgets, delay new investments, or even cancel planned expansions to maintain cash flow, which can have a long-term effect on the strategic direction of the company.
Supply Chain Congestion
To combat higher costs, companies are forced to look for alternative sourcing options. This could lead to congested supply chains as manufacturers try to reconfigure their networks quickly. Disruptions occur for many reasons, including when new suppliers are found, new logistics routes are tested, or when production is moved to other regions. These changes complicate processes and extend timeframes, increasing the pressure on companies to adapt quickly.
Economic Instability
The uncertainty caused by Trump's tariffs is causing economic instability and currency fluctuations as businesses react to the unpredictability of trade policies. EU exports to the US are predicted to drop by between 15% and 17%, leading to a significant 0.4% reduction in the size of the EU economy. This volatility makes it even more challenging for manufacturers to predict costs and make strategic plans. 
Recruitment and Leadership Challenges
Trump’s proposed tariffs are intensifying the competition for skilled executive leadership in European manufacturing. As companies race to adapt their strategies, the demand for leaders with strong expertise in global supply chains and business development is surging. However, the supply of such talent remains limited. This shortage is particularly prominent in regions with a strong manufacturing presence, where many businesses are trying to restructure operations, diversify sourcing, and maintain profitability all at the same time.
Which Industries are Most Affected by Trump’s Tariffs?
Consumer Goods
European companies in the consumer goods sector typically work with tighter profit margins and rely heavily on imported goods like plastics and textiles. Tariffs inflate these import costs significantly, reducing profitability in a sector already contending with fierce competition and consumers looking to save money.
Many companies rely on international supply chains that include U.S. customers and Chinese producers, both of which now come with additional costs. For example, imported plastic toys have seen an estimated cost increase of 25%, leading to potential consumer price hikes of around 10%.
These cost pressures have disrupted supply chains, causing stock shortages and delays. Major retailers have reported significant drops in container bookings from China, leading to goods accumulating at Chinese ports. This disruption reflects the shortages that occurred during the pandemic and has prompted companies to seek alternative suppliers or consider reshoring production.
However, the redirection of Chinese toy exports away from the U.S. has led to increased availability in other markets, such as the UK. This has resulted in lower prices for certain toys in the UK market. However, the situation is constantly changing, and trade tensions continue to create uncertainty in the industry.
To combat these challenges, executives in this industry must lead strategically by diversifying their supplier sources or considering manufacturing closer to their largest markets.
Manufacturing
European manufacturers, particularly in industrial engineering, are feeling the effects of Trump’s tariffs most prominently. Many companies rely on international supply chains that include U.S. customers and Chinese producers, both of which now come with additional costs.
Tariffs on metals and machinery parts force manufacturers to increase their prices, which can make European products less competitive in American markets. The immediate priority for manufacturing leaders is now to maintain profitability while preserving market share by renegotiating supplier terms and assessing pricing.
Food and Beverage
Food and beverage manufacturers in Europe face unique challenges due to their reliance on global agricultural suppliers and packaging materials, many of which come from U.S. or Chinese markets. Tariffs on plastic, glass, aluminium, and imported ingredients can immediately disrupt financial plans. As pricing is sensitive in this sector, even slight increases of around 5% can impact consumer buying behaviour.
Executives must act quickly to protect margins without impacting brand positioning. Leadership in this sector must be able to manage differences in regulations, especially when rerouting supply chains.
How European Manufacturing Businesses Can Reduces the Impacts of Trump’s Tariffs
Reconsidering Supply Chains
Many manufacturers are accelerating plans to nearshore or reshore operations. Making production more regionalised helps businesses avoid tariffs and reduce the impact of increasingly unpredictable global supply chains.
Another solution gaining momentum is the dual-hub model. By establishing production bases in both Europe and the U.S., companies can serve both markets while balancing costs. This kind of transformation requires leaders with the organisational ability to effectively manage two bases at once and lead international teams.
Diversifying Suppliers
Relying too heavily on a single supplier has always been risky, but Trump’s tariffs have further increased that risk. Because of this, European manufacturers are now spreading their supply chains across different regions to avoid disruption and keep costs down.
However, finding new suppliers can be challenging, and it takes strong leadership to build relationships in new regions while also maintaining quality standards without disrupting production. In fast-moving sectors where profit margins are already tight, leaders with these capabilities are in short supply and high demand.
Planning for Different Scenarios
With U.S. trade policies being so unpredictable right now, European manufacturers need to make sure they’re always ready to adapt by planning for a range of different potential scenarios in advance. However, scenario planning only works when a company encourages cross-function collaboration. We’re seeing more demand for executives who are skilled at building strategies that work across the whole organisation. 
Restructuring Contracts and Operations
Tariffs have pushed many manufacturers to rethink how they run aspects of their business, from how they buy materials to how they get products to market. This includes renegotiating supplier contracts and distribution agreements as well as streamlining internal operations to improve efficiency.
Restructuring requires leaders who can handle tough negotiations and keep the team driven and motivated through uncertain times. Organisations that wait too long to bring in experienced leaders may find themselves falling behind when U.S. buyers start looking elsewhere for more reliable or cost-effective suppliers.
Expanding International Trade Partnerships
Some European manufacturers are going one step further and reducing their exposure to the U.S. altogether. By building stronger trade links in regions like the Middle East, Asia-Pacific, or other parts of Europe, companies can tap into new markets and protect themselves from future disruption.
But entering new regions comes with its own challenges. It takes leaders who can navigate different cultures, understand local markets, and build trusted partnerships in new regions. Demand is growing for ambitious commercial executives, especially those with experience in expanding into new markets and driving international growth.
Staying Agile
The most important theme across all these strategies is agility. To stay competitive, manufacturers need to be open to new types of leadership. Traditional hiring models that focus on experience alone are no longer enough for business success. Businesses need adaptable, strategic leaders who can find new opportunities in supply chain disruptions. 
European Manufacturing Leadership Recruitment Experts
At CSG Talent, we specialise in manufacturing executive search, helping companies find senior talent with the expertise and global perspective needed to thrive through trade disruption. Our deep industry knowledge means we understand the challenges businesses are facing, from supply chain pressures to international expansion.
Our extensive global network allows us to identify and connect with top executives across diverse markets, ensuring you find the perfect fit for your leadership team.
If you’re looking to navigate the impact of Trump’s tariffs by hiring executive-level manufacturing talent, contact CSG Talent today.
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