Understanding the automotive trade imbalance between the US and Europe

Gain an insight into the effect of US government tariffs on European markets

The US government's 25% tariff on imported vehicles is putting added strain on Europe’s automotive sector, disrupting supply chains, raising costs, and prompting fears of EU retaliation. With falling sales in China and losses in Russia, European carmakers face mounting financial pressure. The escalating trade tensions may reshape global market dynamics and undermine long-standing transatlantic business models.

Key effects will include:

• Export disruption: Higher tariffs make European cars less competitive in the US, threatening major export revenues.
• Boardroom paralysis: Strategic planning is hindered by policy uncertainty and fears of a broader trade conflict.
• Double-headed pressure: Falling consumer demand in China and reduced European sales compound the financial strain.
• Geopolitical shifts: Trade tensions may trigger EU countermeasures, disrupting global cooperation and supply networks.

Find out more by downloading Understanding the automotive trade imbalance between the US and Europe.