Europe\’s Carmakers Remain on Edge as EU‑US Trade Deal Uncertain

EU‑US tariff talks ease short‑term uncertainty but long‑term worries loom

The backdrop of months where tariff escalation threatened a trade war has been replaced by a negotiated deal. Under the agreement the EU will impose a 15‑percent tariff on American imports, a stark drop from the earlier 27.5‑percent rate set in April.

Industry groups welcome the de‑escalation

• ACEA praised the agreement, emphasizing that the United States represents 22 percent of the EU vehicle export market for 2024.
• Forvia echoed the sentiment, noting that the accord stabilises volatility for all economic stakeholders.

Tariff levels still generate concern

The 15‑percent levy remains far above the 2.5‑percent rate that EU manufacturers enjoyed before President Trump returned to office. ACEA’s director general Sigrid de Vries warned that the levy will continue to hurt not just EU industry but also the United States.

German auto sector bears the brunt

• The United States captures 13 percent of German vehicle exports, positioning the top market for German automakers in 2023.
• Hildegard Mueller, president of the VDA, cautioned that the 15‑percent tariff will cost German companies billions annually.
• Volkswagen recorded a first‑half hit of 1.3 billion euros due to tariffs.

Leadership offers potential solutions

• BMW’s chief Oliver Zipse suggested in June that Europe should drop its import tariffs on cars coming from the United States.
• Volkswagen’s Oliver Blume proposed that the group negotiate a bespoke agreement with Washington that accounts for planned investments in the U.S.

Long‑term implications could trigger job losses

Ferdinand Dudenhoeffer, director at the Center for Automotive Research, warned that a higher U.S. tariff could create “big losers” in Germany. He argued that if BMW and Mercedes increase production in the U.S. to avoid tariffs, they might ship more vehicles to Europe, where import levies are lower. This could reduce production in Europe and potentially cut up to 70,000 jobs in Germany, shifting employment to America.