US replaces expiring 10% surcharge with permanent duties

Predictability in US trade policy is dead for European exporters. On 24 July, the temporary 10% US import surcharge on most goods expires because the law behind it caps presidential tariff action at 150 days (19 U.S.C. § 2132). The tariff does not disappear. Washington needs a different statute to keep charging it, and the replacements can last longer and overlap.

Who actually pays

Before asking how much the tariff costs, ask who bears it. An AHK (German chambers of commerce abroad) study found US buyers absorb more than 70% of tariff costs on German goods. The Kiel Institute estimated the remaining burden costs Germany about 0.15% of GDP, roughly €6.5bn (aktiv-online). Tariffs are not simply a European bill. American importers and consumers carry a large share.

But national totals hide where pain actually lands. In Ireland, goods exports to the US fell 56% year on year in May 2026, to €4.7bn, with pharma exports dropping nearly 59% (Irish Examiner, CSO). That sounds catastrophic until you see how Irish trade data works: multinationals book high-value pharma through Irish subsidiaries, so a handful of shipment timing shifts create wild swings. Ibec, Ireland's business lobby, tracked US-bound exports jumping from €22bn in January–April 2024 to €60bn in the same period of 2025, then crashing to €17bn in 2026 (The Irish Times).

Italy shows how sector losses vanish inside the aggregate. Total Italian exports to the US still grew 3.7% in early 2026 (Assolombarda/ICE). But wine exports fell roughly 15%, with average prices down 10% — producers slashed their own margins to hold American customers (Borsa Italiana/Teleborsa). Furniture was down 16.6%, textiles 5.6% (Il Messaggero). The aggregate held only because pharma surged 54.1% (Il Foglio).

The legal basis keeps shifting

The deeper problem for exporters is a US trade regime that keeps switching legal instruments. The Supreme Court struck down the use of a national-emergency law for tariffs in February 2026. The administration shifted to Section 122, a temporary import-surcharge authority. In May, a trade court ruled even that unlawful, though relief only applied to the companies that sued (Northeastern University, BDO).

Washington is already building longer-lived tools. The US Trade Representative opened Section 301 investigations — a trade-law route that lets Washington impose duties after finding unfair foreign practices — covering 16 economies including the EU, with proposed rates of 10–12.5% (Mayer Brown, National Law Review). Unlike the expiring surcharge, these duties have no built-in sunset. A June EU-US deal capped most European exports at 15%, but a product can look covered by that cap and still face a separate steel or auto duty on top (Euronews). Germany's trade agency warned firms to check product classifications (which tariff category a good falls under), exemptions and documentation for every US-bound shipment (GTAI).

The quieter victims sit further back in the supply chain. In Slovakia, the share of Volkswagen Bratislava's output going to the US has fallen below 15% (Denník E). The real worry is that tariff uncertainty changes where a parent company decides to build its next model. Slovak press reported concern that Porsche Cayenne production could leave Bratislava, affecting hundreds of suppliers, though Volkswagen has not confirmed any transfer (Pravda). The same logic runs across Central Europe: Polish, Czech and Austrian parts makers depend on decisions made in Wolfsburg or Munich.

This is a chronic condition for European exporters. The winners are the White House, which keeps leverage, and firms already producing inside the US. The losers are thin-margin producers, small firms tied to single customers, and traditional sectors like wine, food and furniture where American buyers can simply wait. The cost trade data misses at first is the investment that quietly shifts toward the American market, because no finance chief wants to plan around rules that rewrite themselves every 150 days.