A fresh round of US tariffs has sent shockwaves through global markets, with European retailers taking the brunt of the impact. Companies like Adidas, Puma, and Pandora have seen their stock prices tumble as the tariffs target Southeast Asia, where many of these companies manufacture their goods.

With unpredictable tariff rates, European brands are now facing supply chain disruptions, higher costs, and uncertain future prospects. The escalating tariff war between the US and its global trading partners has put a severe strain on European retailers, CNBC reported.

The Impact of US Tariffs on European Retailers

On Wednesday, President Donald Trump rolled out sweeping new tariffs, promising to reshape global trade and fuel US manufacturing. With a 10% baseline tariff on all imports effective April 5, the US aims to pressure other nations to reduce trade barriers.

As President Donald Trump rolled out his latest round of tariffs, the effects were immediate and widespread. European companies that source much of their production from Southeast Asia found themselves caught in the crossfire, with some of the highest tariff rates imposed on countries like Cambodia, Laos, and Vietnam.

These Southeast Asian nations are central to the production of clothing, footwear, and other goods sold by European retailers.

Major European Brands Hit Hard

For instance, Adidas, one of Europe’s largest sportswear companies, saw its stock drop by 10% following the tariff announcement. Puma, another German giant, suffered a similar fate, losing nearly 11% of its market value. Pandora, the Danish jewelry-maker, wasn’t spared either, with shares plunging by 11%.

As these tariffs make it more expensive to import goods into the US, companies will be forced to either absorb the costs or pass them on to consumers. Both options have their risks. On one hand, companies may face squeezed profits and cash flows; on the other, consumers could face higher prices for their favorite products.

European Stock Markets React

Even before the tariffs were announced, the broader European stock market took a hit, with the STOXX 600 Index dipping by 1.5% early this week, according to BNN Bloomberg. Bank stocks were especially vulnerable, as investors feared that the tariff war could slow global economic growth.

Wall Street futures also dropped, with a sharp decline of 3.1%, as traders moved into safer assets like gold and bonds. With the tariffs expected to stay in place for some time, the outlook for many European brands remains uncertain.

European leaders have faulted Trump’s move to impose, hinting at possible countermeasures. In a post by the Guardian, French President Emannuel Macron, termed the move “brutal and unfounded” adding that all instruments are on the table.

Source: Finance Magnates