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European firms poised for tariffs, plan supply chain

adjustments

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Tariffs of 25% on Canada, Mexico affect Europe indirectly

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Trump threatens EU with similar tariffs on cars, other

goods

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EU leaders urge talks, vow unity against potential US

tariffs

By Adam Jourdan, John Revill, Victoria Waldersee and Giselda

Vagnoni

LONDON, March 4 (Reuters) - European companies, from

Swiss chocolatiers to German car parts makers, are preparing

their 'plan Bs' to adapt to U.S. trade tariffs that became a

blunt reality on Tuesday, with a second barrage specifically

targeting the region expected next month.

U.S. President Donald Trump imposed hefty 25% tariffs on

imports from Mexico and Canada, along with a doubling of duties

on Chinese goods to 20%, moves which could upend nearly $2.2

trillion in two-way annual U.S. trade.

European companies are caught in the middle for now, but

face the prospect of a second barrage of tariffs targeting the

bloc in April, with Trump having floated a 25% "reciprocal" rate

on European cars and other goods.

Switzerland's Lindt & Spruengli, which has several

factories in the United States, may shift the supply chain to

these plants towards Europe and reduce supply coming from Canada

to avoid the impact of Trump's tariffs.

"The volumes that we source currently for Canada can all be

shifted to Europe," CEO Adalbert Lechner told reporters.

"So far, we have a Plan B to avoid these tariffs in Canada."

ADJUSTING SUPPLY CHAINS

German tire and auto parts maker Continental AG,

which has plants in Mexico, said it was "monitoring" the

situation on tariffs and their impact on the sector. It plans to

"optimize" its supply chain to get best value for its clients.

"We are in talks with all of our customers. We cannot yet

say whether this tariffs issue could lead to production lines

being relocated," Continental chief financial officer Olaf

Schick told Reuters.

The firm has seven plants in Mexico, one of which is being

closed. Schick said 90% of truck tires were produced in the U.S.

market and 50% of car tires, with the rest imported mainly from

Europe, but also from South America and Mexico.

"Our position is that we cannot absorb additional tariffs.

As far as our suppliers are concerned: we generally source

locally," Schick said.

While tariffs have dominated corporate America's

discussions, European companies are not yet directly in the line

of fire. But they are increasingly concerned about potential

tariffs impacting cars and other exports in early April.

Cristiano Fini, president of Italian farmers lobby CIA, said

possible tariffs on Europe could cause "billions of dollars of

damage" to the Italian food sector, hitting producers of items

from Parma ham to Prosecco sparkling wine.

"Those exports to the United States are worth more than 2.4

billion (euros), a wealth for Europe as well," he said.

European leaders have looked to show a united and bullish

front to the threat of U.S. tariffs, which analysts fear could

dent the region's economic growth prospects.

"Germany supports the EU Commission's approach of working

with the U.S. government to find a negotiated solution,"

Germany's economy minister Robert Habeck said in a statement.

"But the EU will not be pushed around. If President Trump

imposes the announced tariffs on EU products, we will react with

unity and self confidence."