In a stunning reaction, European automakers voiced their disdain over President Trump’s newly introduced 25% import tax on vehicles, labelling it an excessive burden that jeopardises both consumer interests and corporate viability on both sides of the Atlantic. The European Automobile Manufacturers’ Association warns that the measure will simultaneously harm global automotive sectors and the US manufacturing base.
The ramifications, as expressed by Hildegard Müller, head of Germany’s auto industry association, extend far beyond mere tariffs. He predicts a detrimental impact on automobile manufacturers and all interconnected industries, with especially harsh consequences for consumers in North America. Müller underscored that the tariffs could stifle growth and prosperity universally.
With the stakes particularly high for prominent brands like BMW, Volkswagen, and Mercedes-Benz, as well as their extensive supplier networks, the threat to Europe’s already strained economy is pronounced. The US is the largest market for European automobiles, with significant exports amounting to 56 billion euros in 2023 alone. Given the automotive sector’s contribution to 13.8 million jobs within the EU, the stakes are monumental.
Amidst a domestic market contraction and increased competition from lower-cost Chinese electric vehicles, Europe’s carmakers face precarious circumstances. Germany and Italy are particularly vulnerable, given the substantial proportions of their non-EU exports sent to the US—24% and 30%, respectively. The consequences of these tariffs could trigger a significant decline in exports of 7.1% for Germany and 6.6% for Italy, according to analysts.
While US automakers face a lesser risk of retaliatory tariffs, with only 2% of their production heading to the EU, they too were affected, as stocks of Ford and General Motors dipped sharply. The European automotive sector advocates for renewed dialogue between the EU and the US to avoid escalating tensions into a full-blown trade war and foster a balanced approach to tariff discussions.
European automakers are alarmed by President Trump’s 25% import tax on cars, which they believe will negatively impact businesses and consumers on both sides of the Atlantic. The auto industry, vital to Europe’s economy, is struggling with stagnant growth and competition from China. Analysts warn of potential export declines, notably affecting Germany and Italy, and underscore the need for urgent dialogue to avert a trade war.
The introduction of tariffs on automotive imports is creating ripples through the European automotive industry, threatening both companies and consumers alike. As the industry grapples with external pressures and the potential for sanctions, the urgency for dialogue between Europe and the US becomes clear. Without immediate negotiations to resolve the issue, the consequences could reverberate through economies and livelihoods on both continents.
Original Source: apnews.com
