Beyond the direct costs, the US steel tariff regime is creating a powerful “chilling effect” that may lead some European firms to stop exporting to the American market altogether. For many, particularly smaller businesses, the combination of high costs, bewildering complexity, and catastrophic risk is simply not worth the reward.
The primary factor is the 200% penalty for misdeclaration. For a small or medium-sized enterprise (SME), such a fine would not be a setback; it would be a death sentence. The mere existence of this penalty makes exporting to the US a high-stakes gamble.
Compounding this is the administrative burden. Unlike large multinationals, SMEs do not have armies of lawyers and compliance officers. The task of creating a perfect “paper trail” for their products could consume a disproportionate amount of their limited resources, making the venture unprofitable before a single tariff is even paid.
The constant uncertainty of the “rolling list” is the final straw. An SME cannot build a sustainable export strategy around a market where its products could be hit with a massive new cost with only a few months’ notice.
Faced with these obstacles, the rational choice for many may be to pivot away from the US and focus on more stable and predictable markets. This chilling effect, while difficult to measure, could result in a long-term reduction in transatlantic trade and a loss of variety and quality for US consumers.