International trade is experiencing a critical situation. Europe, the US and China face trade tensions that could destabilize the global automobile industry. European manufacturers, caught between Donald Trump’s threats of tariffs and Chinese competition, see how electrification and environmental regulations further complicate the panorama.
Thus, the head of Mercedes-Benz and new president of the European Automobile Manufacturers Association (ACEA), Ola Källenius, has asked the European Union to urgently reach a “grand agreement” with the US “to avoid a trade war” that could be devastating for an already weakened sector.
But the return of Trump to the White House, who will take office as president of the United States for the second time next Monday the 20th, promises a scenario of tariff tensions and protectionist policies that could alter the balance.
Donald Trump’s threats, tariffs and their consequences for Europe
Donald Trump has reiterated his intention to “impose a general 20% tariff on all imports American non-Chinese”, which includes European cars. These threats come at a delicate time for European manufacturers, who They allocate more than a fifth of their exports to the US.
The president-elect of the United States has also demanded that the European Union to increase the purchase of American oil and gas “on a large scale.” Otherwise, He already warned on December 20 on their social networks will apply “tariffs across the board.”
This message from the president-elect surprised EU officials, who considered the threat unusual, especially after the president of the European Commission, Ursula von der Leyen, had already expressed in November the possibility of increasing purchases of liquefied natural gas. (LNG) as an alternative to Russian supplies.
Furthermore, von der Leyen He also then called for “a transatlantic partnership” between the EU and the US. after the elections, since the EU was already working then on measures to avoid tariffs and increase purchases of American goods such as LNG and agricultural products. “We are united by a true partnership between our peoples, uniting 800 million citizens,” he said.
Currently, in addition to the extra tariffs on Chinese cars, the European Union imposes a 10% tariff on car importswhile the United States taxes European vehicles at 2.5%. However, Trump’s new tariff policies could destabilize this balance. During his first presidency, both sides already clashed in a trade war that affected trades valued at hundreds of millions of dollars.
The situation is also marked by the environmental restrictions imposed in Europe. The CAFE regulation (acronym for ‘Corporate Average Fuel Economy’) forces manufacturers to drastically reduce CO₂ emissions, threatening those who do not comply with multimillion-dollar fines. This regulatory framework contrasts with Chinese competition, whose manufacturers have made significant progress in electrification, putting even more pressure on European brands.
The position of European manufacturers and tensions with China
Ola Källenius, CEO of Mercedes-Benz and president of ACEA, has been one of the strongest voices in urging the European Union to seek a “grand agreement” with the US. In a recent letter addressed to the European Commission, the European Parliament and the Member StatesKällenius warned that “it is essential to avoid a trade conflict” that could paralyze the investments necessary for the transition to electrification.
ACEA has also asked Brussels to make emissions fines more flexible by 2025arguing that current market conditions make compliance difficult. The 6% drop in sales of electric vehicles in Europe during 2024, driven by the withdrawal of aid in Germany, is an example of the difficulties in adapting to climate objectives.
Europe not only faces problems with the United States. The growing presence of Chinese manufacturers in the European market also worries ACEA. The European Union has responded with tariffs on Chinese electric cars, seeking to protect its local manufacturers. However, this measure could complicate trade relations with China, a key partner in sectors such as batteries and semiconductors.
ACEA has called for a balanced approach that promotes international collaboration. The bosses insist that trade with China and the United States is vital for European economic prosperity and that a trade war could have devastating effects.
Thus, the European automobile industry is on a tightrope, once again, caught between the threat of US tariffs, environmental restrictions and Chinese competition. Avoiding a trade war and closing agreements that encourage collaboration will be key, but we will have to see which chip Trump chooses to move.
Source: www.motorpasion.com
