European Tech Sector Braces for Impact from Trump Administration Tariffs
▼ Summary
– The US has imposed a 20% tariff on EU imports, with Switzerland facing a 32% tariff, doubling the rate applied to the UK.
– European tech companies are concerned about disrupted supply chains, price adjustments, and hindered transatlantic venture capital due to the tariffs.
– Hardware-reliant companies, like Finland’s HappyOrNot, may need to consider relocating production to the US to mitigate financial burdens.
– Service-based startups and software companies will also face indirect adverse effects, including disruptions in supply chains and venture capital barriers.
– The tariffs have already caused global market turmoil, with potential long-term impacts on European startups’ strategic decisions and opportunities for Europe to attract top talent.
The European tech sector is gearing up for substantial challenges following the Trump administration‘s announcement of extensive tariffs. The United States has imposed a 20% tariff on imports from the EU, which is double the rate applied to the UK. Switzerland faces an even steeper tariff of 32%.
Several European tech companies, investors, and analysts have expressed concerns to TNW that the new tariffs could disrupt supply chains, necessitate price adjustments, and hinder the flow of transatlantic venture capital, plunging both large and small European tech businesses into uncertainty.
Louis Fearn, principal and sustainability lead at InMotion Ventures, the investment branch of Jaguar Land Rover, stated, “Trump’s trade tariffs will have a huge impact on the global tech landscape, forcing startups to reconsider their headquarters and assess alternative markets.”
For hardware-reliant companies, the tariffs present a significant financial burden. Miika Mäkitalo, CEO of HappyOrNot, a Finnish company that manufactures customer feedback terminals, mentioned that nearly half of their business is with the US. He noted that the tariffs might compel the company to consider “initiating assembly and production in the United States.”
Despite the tariffs being imposed solely on physical goods, service-based startups will also experience adverse effects.
Benjamin Avraham, founder and CEO of Swiss fintech company Okoora, highlighted numerous “secondary effects” that could indirectly harm the “smaller startup community.” These effects include disruptions in supply chains, barriers to venture capital investments, and increased volatility in exchange rates.
Software companies might also face new challenges. Amanda Brock, CEO of the open-source lobby group OpenUK, pointed out that while software is traditionally considered an intangible service, it “may be subject to other trade restrictions.”
The consequences are already evident. Trump’s tariffs have created market turmoil and risk exacerbating existing global trade tensions. Stock markets have plummeted worldwide, and several countries have vowed retaliatory measures. Martin Hartley, Group CCO of international tech consultancy Emagine, remarked, “The newly announced blanket tariffs by President Trump create more uncertainty in the global tech industry. These measures could make businesses in the EU avoid the US altogether to sidestep additional costs.”
For European startups, the tariffs might necessitate a critical strategic decision. Matt Penneycard, partner at UK-based Ada Ventures, warned, “Trump is playing with fire. Startups selling to US customers now face two options: anchor in Europe and embrace its stability, or find ways to maintain access to the States by setting up operations there.”
Penneycard also suggested that this situation could present an opportunity for Europe. “As the US becomes a tougher place to operate, top talent may follow stability — this is Europe’s moment to build a new Silicon Valley.”
European startups are a central focus of the TNW Conference, scheduled for June 19-20 in Amsterdam. Tickets for the event are currently available. Use the code TNWXMEDIA2025 at checkout to receive a 30% discount.
(Source: The Next Web)
