Belgium’s economy could take a hit if the United States moves forward with new tariffs on European goods. According to a recent study by ING, a 25 per cent import tariff imposed by the US could cause Belgium’s economy to shrink by 0.26 per cent in the short term. This may not sound like much, but in economic terms, it represents a significant financial impact.
Belgium is deeply connected to international trade, and the US is its fourth-largest export market. In 2023, Belgium exported goods worth 28.03 billion euros to the US, making up 7.6 per cent of its total exports. Some of Belgium’s biggest exports to the US come from the pharmaceutical and chemical industries. These industries play a crucial role in the country’s economy and provide thousands of jobs.
How the Tariffs Could Cause More Damage
The consequences of these tariffs could grow over time. If they remain in place for a long period, Belgium’s exports to the US could drop by as much as 45 per cent, according to ING. This could result in Belgium’s overall economy shrinking by up to 0.69 per cent.
Tariff Tensions: U.S. Hikes, Then Backs Off on Canada Steel Duties
The effects would not be limited to direct exports alone. Belgium is closely linked to other European countries through trade. Some of the products Belgium sends to the US include components and materials imported from other European nations. If the US imposes tariffs on all European goods, Belgium will feel the impact not just from its own reduced exports but also from the decline in trade among its European partners.
A slowdown in trade could make businesses more cautious about investing and hiring new workers. Consumers, seeing economic uncertainty, may cut back on spending. This could weaken Belgium’s economic growth even further.
Trade War Could Make Things Worse
Currently, some US tariffs on European steel, iron, and aluminium are already in place, but they have not caused major damage to Belgium’s economy. However, if the US expands these tariffs to all European goods, the European Commission has made it clear that it will retaliate. This means Europe may introduce tariffs on American goods, particularly those from states that strongly support the US government. If both sides continue to impose new tariffs on each other, a full-scale trade war could break out.
ING’s study did not include the possibility of a trade war, but such a scenario could make the economic damage even worse. Tariffs make goods more expensive, which can hurt businesses and consumers on both sides. If the situation escalates, Belgium and the entire European Union could face even greater financial difficulties.
For now, Belgium, along with the rest of Europe, watches closely as tensions between the US and the EU unfold. The full impact of these potential tariffs remains uncertain, but if they go into effect, Belgium’s economy will be among those hit the hardest.
