Tech outfits across Europe are reeling, with firms warning of ruptured supply chains, rising costs, and a venture capital pipeline at risk of drying up. The move has hit both physical and service-led businesses.

InMotion Ventures principal Louis Fearn said: “Trump’s trade tariffs will have a huge impact on the global tech landscape, forcing startups to reconsider their headquarters and assess alternative markets.”

For hardware-driven companies like Finnish feedback box maker HappyOrNot, which does half its business stateside, the pain is very real. Boss Miika Mäkitalo reckoned the firm might be forced to “initiate assembly and production in the United States.”

Even startups not shipping widgets are bracing for the knock-on damage. Swiss fintech Okoora’s CEO Benjamin Avraham flagged “secondary effects” for the “smaller startup community” from chain disruption, jittery exchange rates, and tightening VC taps.

OpenUK chief Amanda Brock added that software, while intangible, “may be subject to other trade restrictions” in the wake of this latest shock.

The reaction’s already in motion. Markets tanked, with investors scrambling, and retaliatory noise is ringing from every direction.

Emagine Group CCO Martin Hartley said, “The newly announced blanket tariffs by President Trump create more uncertainty in the global tech industry, prompting businesses in the EU to consider avoiding the US altogether.”

Startups now face a stark choice. “Trump is playing with fire,” warned Matt Penneycard of Ada Ventures. Startups selling to US customers now face two options: anchor in Europe and embrace its stability, or find ways to maintain access to the US by setting up operations there.

He believes there’s an upside if Europe plays its cards right: “As the US becomes a tougher place to operate, top talent may follow stability — this is Europe’s moment to build a new Silicon Valley.”