European automakers say Trump’s tariffs will ‘hurt consumers’
European automakers have voiced their vehement opposition to the auto tariffs proposed by Trump, stating that these tariffs will have a negative impact on consumers. European automobile manufacturers, who are contending with sluggish economic growth at home and intensifying competition from China, voiced their strong dissatisfaction with the United States’ import tax on vehicles on Thursday. They characterized the tax as a significant burden that will have a negative impact on both consumers and businesses across the Atlantic.
According to the European Automobile Manufacturers Association, the recently proposed import tax of 25 percent by President Donald Trump will have a negative impact on both manufacturing in the United States and manufacturing in other countries throughout the world simultaneously. The leader of the German automotive industry group, the VDA, stated that the tariffs would impose difficulties on automobile manufacturers as well as all entities that are a part of the intricately integrated global supply chain. This would result in unfavorable repercussions primarily for consumers, particularly in North America.
In her statement, Hildegard Mller warned that the ramifications will have a negative impact on growth and prosperity across the board. In addition to having a large impact on the economy of Europe as a whole, the ramifications are considerable for BMW, Volkswagen, Mercedes-Benz, Volvo, and Stellantis, as well as their extensive supplier networks. In the year 2023, European manufacturers exported automobiles and components to the United States with a total value of 56 billion euros. This indicates that the United States is the largest export market for the European automotive sector. The automobile industry in Europe is responsible for 13.8 million jobs, which is equivalent to 6.1 percent of the total employment that is found inside the European Union.
Automobile manufacturers in Europe are facing a diminished domestic market in addition to the emergence of competition from electric vehicles produced in China that are more reasonably priced. The European economy, which saw no growth in the final quarter of 2024 and only a 0.9 percent increase for the year as a whole, would be put under strain by the challenges that are present within the automobile sector. Particularly susceptible are the automobile sectors of Germany and Italy, with twenty-four percent of German exports and thirty percent of Italian exports to markets outside of the European Union destined for the United States market. Volkswagen, Mercedes-Benz, and BMW are just some of the well-known automobile manufacturers that produce their products in Germany.
According to the findings of an analyst at Oxford Economics named Clarissa Hahn, this would have a huge impact on a sector that is responsible for a significant portion of the bloc’s GDP and provides employment for millions of people. She predicted that the amount of goods exported from Germany would decline by 7.1%, while the amount of goods exported from Italy would decrease by 6.6%. Due to the fact that their exports to the European Union only account for two percent of their overall production, American vehicle makers are only marginally vulnerable to the possibility of retaliatory actions being taken against them. Despite this, the stock prices of Detroit’s Ford and General Motors witnessed a considerable decrease prior to the opening of the market in the United States on Thursday. This was mostly owing to the fact that the industry is extremely dependent on international trade with its suppliers.
The European Manufacturers’ Association has stressed the importance of the European Union and the United States initiating conversations with the goal of obtaining a rapid resolution in order to avert the application of tariffs and the negative impacts that are associated with a trade battle. It has been advocated by Mller, the head of the German car association, that negotiations between the European Union and the United States over a bilateral agreement take place as quickly as possible. The many tariff and non-tariff barriers that influence vehicle products would be addressed through this agreement, which would give a platform for doing so, which might potentially result in a framework that is more equal.
