Europe Blasts Trump Auto Tariffs, Warns of Fallout./ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ European officials and automakers sharply criticized President Donald Trump’s new 25% auto import tariff, warning it could damage both economies, threaten millions of jobs, and deepen trade tensions. Industry leaders urged urgent dialogue to prevent a full-blown transatlantic trade war.
Trump Auto Tariffs + Europe: Quick Look
- What Happened: Trump imposed a 25% tariff on imported autos.
- Europe’s Reaction: Widespread backlash from carmakers and officials.
- Industry Impact: EU exports €56B in vehicles/parts to U.S.
- Economic Risk: German and Italian carmakers most exposed.
- Key Quote: “It will hurt global automakers and U.S. manufacturing.”
- Stock Impact: GM and Ford shares tumbled pre-market.
- Job Threat: Europe’s auto sector supports 13.8 million jobs.
- What’s Next: EU calls for urgent negotiations with Washington.
Europe Blasts Trump Auto Tariffs, Warns of Fallout
Deep Look
Subtitle: Trump’s Auto Tariffs Risk Economic Shock Across Europe
President Donald Trump’s newly announced 25% tariff on auto imports has ignited a wave of criticism across Europe, with carmakers and policymakers warning of dire consequences for an already fragile European economy.
The European Automobile Manufacturers’ Association (ACEA) said Thursday that the tariffs will “hurt global automakers and U.S. manufacturing at the same time,” with ripple effects on jobs, investment, and consumer prices. The tax, aimed at boosting domestic production, could backfire on both continents.
Germany and Italy stand to lose the most. Nearly a quarter of German and 30% of Italian non-EU auto exports go to the U.S., making their industries especially vulnerable.
“The consequences will cost growth and prosperity on all sides,” said Hildegard Müller, president of Germany’s auto lobby VDA.
European automakers exported €56 billion in vehicles and parts to the U.S. in 2023. Companies like BMW, Volkswagen, Mercedes-Benz, Volvo, and Stellantis — along with their vast supplier networks — are now reassessing their U.S. strategy amid fears of sustained losses and declining market access.
The timing is also problematic. Europe’s economy barely grew in the final quarter of 2024, and overall annual growth was just 0.9%. Chinese electric vehicles are flooding the European market, increasing price pressure and making a trade conflict with the U.S. even more dangerous.
Analysts warn of steep declines. Oxford Economics projected German exports could fall by 7.1% and Italy’s by 6.6% due to the tariffs.
“This would deliver a substantial blow to a sector that sustains millions of jobs,” said Clarissa Hahn, an economist at the firm.
Even U.S. automakers are feeling the pressure. Though only 2% of American vehicle production is exported to the EU, cross-border supply chains mean costs will rise. Shares of Ford and General Motors both dropped sharply in pre-market trading Thursday.
The European manufacturers’ association and German auto industry leaders are calling for immediate negotiations.
“The EU and the U.S. must engage in dialogue to find an immediate resolution to avert tariffs and the damaging consequences of a trade war,” ACEA said.
Müller echoed that sentiment, urging a bilateral agreement to eliminate tariff threats and open a forum to address “non-tariff barriers” affecting the transatlantic auto market.
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