European companies take evasive action as Trump tariffs hit, brace for second wave

By Adam Jourdan, John Revill, Victoria Waldersee and Giselda Vagnoni

LONDON (Reuters) - European companies, from Swiss chocolatiers to German car parts makers, are preparing their 'plan Bs' to accommodate to U.S. commercialized tariffs that became a blunt world connected Tuesday, with a 2nd barrage specifically targeting the portion expected adjacent month.

U.S. President Donald Trump imposed hefty 25% tariffs connected imports from Mexico and Canada, on with a doubling of duties connected Chinese goods to 20%, moves which could upend astir $2.2 trillion successful two-way yearly U.S. trade.

European companies are caught successful the mediate for now, but look the imaginable of a 2nd barrage of tariffs targeting the bloc successful April, with Trump having floated a 25% "reciprocal" complaint connected European cars and different goods.

Switzerland's Lindt & Spruengli, which has respective factories successful the United States, whitethorn displacement the proviso concatenation to these plants towards Europe and trim proviso coming from Canada to debar the interaction of Trump's tariffs.

"The volumes that we root presently for Canada tin each beryllium shifted to Europe," CEO Adalbert Lechner told reporters.

"So far, we person a Plan B to debar these tariffs successful Canada."

ADJUSTING SUPPLY CHAINS

German tyre and car parts shaper Continental AG, which has plants successful Mexico, said it was "monitoring" the concern connected tariffs and their interaction connected the sector. It plans to "optimize" its proviso concatenation to get champion worth for its clients.

"We are successful talks with each of our customers. We cannot yet accidental whether this tariffs contented could pb to accumulation lines being relocated," Continental main fiscal serviceman Olaf Schick told Reuters.

The steadfast has 7 plants successful Mexico, 1 of which is being closed. Schick said 90% of motortruck tires were produced successful the U.S. marketplace and 50% of car tires, with the remainder imported chiefly from Europe, but besides from South America and Mexico.

"Our presumption is that we cannot sorb further tariffs. As acold arsenic our suppliers are concerned: we mostly root locally," Schick said.

While tariffs person dominated firm America's discussions, European companies are not yet straight successful the enactment of fire. But they are progressively acrophobic astir imaginable tariffs impacting cars and different exports successful aboriginal April.

Cristiano Fini, president of Italian farmers lobby CIA, said imaginable tariffs connected Europe could origin "billions of dollars of damage" to the Italian nutrient sector, hitting producers of items from Parma ham to Prosecco sparkling wine.