The White House’s tariff policy is beginning to expose fault lines in Europe’s industrial economy, putting new pressure on sectors already contending with high energy costs, uneven demand and an increasingly fierce global race for technological leadership.

But other key sectors in the European economy are doing surprisingly well, despite the difficulties.

The European auto sector is being hit hard. Carmakers – including Volkswagen, Mercedes and BMW from Germany; Sweden’s Volvo; Jaguar-Land Rover from the U.K.; and Italo-Franco manufacturer Stellantis, which includes Fiat-Chrysler and Peugeot – traditionally send around a quarter of their exports to the U.S. But those exports have been sliding since April, when the new tariff policy was unveiled.

Also struggling to adjust are European makers of electric vehicle batteries and components, industrial machinery and high-precision instruments.

Wine and spirits – including Italian, French, and Spanish wine, Belgian beer, and Scotch and Irish whiskey – plus cheese, olives, cured meats, and other high-end gastronomic products are also struggling. That is compounded by the fact that many suppliers are too small to absorb higher costs and that adjusting production levels is slow, given that many of these products require months or years to be ready for market.

But other sectors appear to be weathering the storm better than initially expected –at least so far.

“The surprise isn’t that certain sectors are struggling,” Javier Noriega, chief economist with Hildebrandt and Ferrar investment bankers, told Just the News. “When the tariffs were announced, most observers expected every economic sector that was highly exposed to the U.S. market to suffer.

“What is more of a surprise is that pharmaceuticals, aerospace companies, luxury goods, and green tech remain relatively robust,” Noriega said.

The pharmaceutical sector has benefited from what economists are calling high “mutual dependence” between U.S. and European companies, while supply chains have been less prone to contract because products are highly regulated on both sides of the Atlantic. Additionally, some pharmaceutical products benefit from tariff exclusions related to national security or exclusions for essential medical goods.

That is also the case for defense and aerospace companies, which is an area where the U.S. and Europe continue to cooperate. And rising NATO military budgets demanded by the White House are helping to compensate for trade frictions. Digital services are in a similar situation and are largely unaffected by goods-based levies.

Luxury product makers like Italy’s Gucci and Prada; Louis Vuitton, Chanel, and Hermès from France; and Swiss watchmakers including Rolex and Omega are not as price sensitive as more mid-tier competitors. The story is a similar one for companies operating in the tourism and hospitality sectors, which benefit from the strong U.S. dollar.

And many European firms in the green technology sector benefit from having U.S. subsidiaries that allow them to continue investing in grid technology, energy storage systems, and engineering services.