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Europe markets open higher as US tariffs force trade realignment

by September 26, 2025
by September 26, 2025

European exchanges kicked off the session strongly on Friday, with London’s FTSE 100 rising to 9,227.08 (+0.14 %), Germany’s DAX opening at 23,629.84 (+0.40 %), and France’s CAC 40 reaching 7,845.82 (+0.65 %) in early trading.

These gains come as investors in Europe recalibrate their expectations in light of new US tariffs targeting pharmaceuticals, heavy trucks, and select consumer goods.

The shift promises to reverberate through supply chains and trade relations, particularly for European exporters already facing tighter global headwinds.

Market participants are also factoring in how higher US import costs may influence transatlantic demand, especially for goods where Europe has traditionally been a major supplier.

US tariffs heighten trade tensions across Europe

Beginning 1 October, the US will impose a 100 % tariff on branded and patented pharmaceutical imports, unless firms break ground on US manufacturing operations.

Heavy trucks will face a 25 % duty, while kitchen cabinets, bathroom vanities, and upholstered furniture will carry tariffs of 50% and 30%, respectively.

For Europe, this tariff package threatens to undermine export competitiveness in key industries.

Many European pharmaceutical manufacturers are watching closely, seeking ways to mitigate exposure by altering logistics or negotiating exemptions.

Automakers and truck manufacturers across Germany and Sweden are also reviewing their US sales strategies, given the pressure these levies could add to an already challenging environment for vehicle exports.

European response: steel duties and countermeasures

As the US presses ahead, the European Union is preparing its own trade defences. German media reports indicate that the EU plans tariffs of up to 50% on Chinese steel imports in the near term.

Meanwhile, Washington has launched a national security investigation into medical device imports, a move that could justify further escalation in trade restrictions.

European policymakers now face the challenge of responding firmly without triggering runaway trade retaliation. The balancing act will involve protecting critical industries, preserving export markets, and managing diplomatic risk.

In addition, industry groups across Europe are urging Brussels to coordinate with member states to provide targeted support for sectors most exposed to tariff disruptions.

Monetary policy, inflation, and investor risk

The tariff-driven cost pressures have forced markets to reprice expectations for central bank action.

In the US, investors now factor in approximately 39 basis points of easing by December as traders become more cautious in light of inflation uncertainty.

In Europe, attention shifts to regional data. Friday sees the release of Spain’s inflation figures, UK mortgage lending statistics, and a European economic sentiment index.

These metrics will influence how the European Central Bank and national regulators assess the trade-inflation-growth equation.

Investors also look ahead to the US August PCE inflation data, forecast to show a 0.2 % rise, which could sway global sentiment and central bank commentary later in the session.

For Europe, the outcome may determine whether investor momentum continues or retreats, particularly in export-heavy sectors that rely on stable transatlantic trade conditions.

The post Europe markets open higher as US tariffs force trade realignment appeared first on Invezz

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