The additional tariffs imposed by the United States on imported vehicles could cause serious harm to European manufacturers, given that the United States is their largest export market in terms of value.

A “Liberation Day” for Trump

For Donald Trump, it’s a “Liberation Day,” but for the automotive industry, it’s an earthquake. The additional 25% tariffs announced by the US president last week take effect this Wednesday.

This provision applies to all passenger cars imported into the United States. Only models that have at least 75% “Made in the USA” parts will be exempt.

This decision presents a challenge for European manufacturers, given that vehicles exported to North America were previously subject to a 2.5% tax (which will now increase to 27%). Motor vehicles are among the three main categories of goods exported by the European Union to the United States, alongside pharmaceutical and medical products.

USA: Leading Export Market by Value

According to Eurostat, the United States currently ranks second among European manufacturers’ export markets in terms of volume, with approximately 750,000 vehicles shipped in 2024 (out of a total of 5.4 million). It ranks first in terms of value, reaching 38.9 billion EUR. The United Kingdom follows closely behind with a sum of 34.3 billion EUR. China (€14.5 billion), Turkey (12 billion EUR), and Switzerland (8.5 billion EUR) are also notable.

Impact on the European Automotive Industry

Vulnerability of European manufacturers: German manufacturers, such as Volkswagen, Mercedes-Benz, and BMW, are particularly vulnerable due to their strong presence in the US market.

Impact on suppliers: European suppliers, including those in France, will also be affected, as they supply German manufacturers exporting to the US.

Impact on US consumers: The tariffs will increase the prices of imported vehicles, thus affecting US consumers.

Reactions and outlook

EU reactions: The European Commission has expressed concern and promised to protect the EU’s economic interests, considering retaliatory measures.

Future negotiations: The European Automobile Manufacturers’ Association (ACEA) is calling for dialogue to resolve the conflict and avoid negative consequences.

In summary, US tariffs on European vehicles will have significant economic consequences. Both for the automotive industry and for the EU’s overall economy, Trump’s monetary policy could trigger a trade escalation between the two regions.