The latest analysis from Allianz Trade indicates that the ongoing US tariffs and resulting trade conflicts are having profound effects on global supply chains. Companies are increasingly diverting their trade flows to cushion cost increases – with considerable consequences for European exporters.
Effective US tariffs are rising
The average US tariff rate was 10 percent in July 2025, lower than the expected 13 percent. However, Allianz Trade estimates that it could rise to about 14 percent by September. Without companies adjusting their sourcing and shifting production, the rate would be around 17 percent.
“Continuous changes in tariffs are keeping companies on their toes globally, and uncertainty looks like it’s here to stay,” said Milo Bogaerts, CEO of Allianz Trade in Germany, Austria, and Switzerland. “However, companies are not sitting idly by but are actively seeking alternative solutions. As a result, trade flows and supply chains are shifting.”
Trade flows shift: less China, more Asia
According to the study, US imports from China decreased to 9 percent of total imports in July 2025 – down from 14 percent in 2024. At the same time, imports from Southeast Asia, India, and Taiwan increased from 17 percent the previous year to 24 percent.
Allianz Trade asserts that this shift significantly helps keep the effective tariff rate lower than feared.
“However, the room for further diversification of supply chains without significant investment commitments is limited,” explained Ana Boata, Head of Economic Research at Allianz Trade.
Moreover, additional products are on the US investigation list, with significantly higher tariffs potentially being adopted by the end of the year.
Implications for the European Union
European exporters are affected as well. The current effective US tariff rate on EU imports stands at 13 percent, up from around 1 percent in 2024. Allianz Trade predicts that this could drop to 12 percent – provided the negotiated agreement between the USA and the EU is approved.
The agreement proposes a reduction in US tariffs on European cars from 27.5 percent to 15 percent. In return, the EU would need to abolish tariffs on US industrial goods and grant preferential market access to numerous agricultural and seafood products. However, some member states have reservations about this.
“Approval of the agreement might help European companies recover the market share lost in the USA this year (-2 percentage points), particularly in aircraft and aircraft parts as well as semiconductor equipment,” Boata stated. “More importantly, it would be a significant relief for European car manufacturers, as economic uncertainty and new tariffs led to a considerable decline in European car exports during the first half of 2025.”
Pressure on the automotive industry
The automotive sector is particularly affected. According to Allianz Trade, German car exports to the USA fell by 7 percent in the first half of 2025 compared to the previous year. Although the reduction in US car tariffs to 15 percent would provide some relief, the level remains significantly higher than the previous tariff of 2.5 percent. This means manufacturers continue to face a significant competitive disadvantage.
More on this topic: German exports weaken: US tariffs push exports to their lowest level since 2021
