Trump's trade restrictions can cause Dutch economy to contract, Allianz warns

Allianz Trade has issued a warning that new trade restrictions proposed by U.S. President-Elect Donald Trump will negatively affect global economic growth. The United States is the Netherlands’ most important trading partner outside the European Union, and Allianz warns that the Dutch economy could shrink by 0.5 percent as a result of these tariffs.

The credit insurer predicts a reduction of global economic growth by 0.8 percentage points, nearly a third of global growth, due to these tariffs. The restrictions are expected to include a 25 percent tariff on Chinese imports and a 5 percent tariff on products from other countries, including the European Union.

If tariffs on European imports rise to 10 percent, the shrinkage could reach 1 percent, Allianz Trade predicts. Dutch industries that rely heavily on exports to the U.S. will be most affected, particularly technology and machinery sectors.

Should trade disputes with China and Europe escalate, Allianz anticipates tariffs on Chinese goods could rise to 60 percent and European imports to 10 percent. According to the insurer, these increases would significantly impact economies worldwide, with the Netherlands particularly vulnerable due to its open, export-driven economy.

Johan Geeroms, risk director at Allianz Trade, highlighted the potential damage to the Dutch technology and machinery manufacturing sectors. “A lot of products are sent from these sectors to the U.S.,” he said.

“The tariff increase will weaken their competitive position.” Small and medium-sized enterprises in the Netherlands could also struggle with disruptions in their supply chains due to rising protectionism and retaliatory measures.

In addition to trade disruptions, Allianz Trade forecasts rising inflation in the U.S. driven by Trump's expected fiscal policies, such as tax cuts, deregulation, and subsidies. The credit insurer has revised its U.S. inflation forecast upward to 2.9 percent in 2025 and 3.4 percent in 2026, compared to previous projections of around 2.2 percent. These inflationary pressures will also likely spill over into the Netherlands, pushing inflation to potentially 4 percent, Geeroms warned.

ABN Amro CEO Robert Swaak pointed out that Trump may not actually implement the policies that he has announced. He believes it is too early to estimate the impact it will have. “It is important that the American government gets to work first,” he said.