Belgium faces economic hit from potential US tariffs, ING warns

Belgium’s economy could shrink by 0.26 per cent in the short term if the United States imposes 25 per cent import tariffs on all European goods, according to a study by ING. Over the long term, the economic consequences could be even more severe.

The United States is Belgium’s fourth-largest export market, accounting for 28.03 billion euros in trade in 2023 - 7.6 per cent of the country’s total exports. The Belgian economy is particularly exposed in the pharmaceutical and chemical sectors, which form a significant part of its exports to the US.

Due to Belgium’s deep integration into global supply chains, not all of its exports are fully domestically produced. This means that Belgium is also indirectly affected by US tariffs through its trade relationships with European partners.

Risks

If tariffs remain in place for an extended period, the damage could escalate. ING estimates that Belgian exports to the US could fall by as much as 45 per cent, causing GDP to drop by up to 0.69 per cent. Rising uncertainty may further weaken investment and consumer spending, slowing Belgium’s growth significantly.

While some US tariffs on steel, iron, and aluminium are already in effect, their impact on Belgium is limited. However, the European Commission has indicated it will retaliate by imposing tariffs on American goods, particularly those from key Republican states, which could unleash a full-scale trade war.

ING’s study does not account for such a trade war, which could have even more severe economic consequences for Belgium and the EU.

^{Illustration shows the headquarters of the ING Belgium banking group © BELGA PHOTO BENOIT DOPPAGNE}