U.S Tariffs damage European Auto Industry
European stocks sharply declined on Thursday as European stock markets reacted to the new automotive tariffs recently announced by U. S. President Trump.
Trump declared a tax on all cars shipped into the United States to be enacted starting April 2.
The Stoxx European cars index slumped by 2.2%, resulting in the regional Stoxx 600 index dropping by almost 0.7% as opposed to the earlier figure. Stellantis, the Jeep maker, was down by 4.5%, Mercedes-Benz shares lost 3.6%, and BMW, the German giant, was down by 2.5%.
Trump announced a 25% levy on “all cars not manufactured in the United States.” The U.S. president warned that the E.U. and Canada cooperative alliance would suffer from far larger tariffs if they attempted to hurt the USA.
European Commission President Ursula von der Leyen expressed her disappointment with Trump’s action and deemed it “deeply regrets.”
She stated, “The E.U. will proceed to look for diplomatic settlements all while protecting its commercial interests.” She concluded with that remark.
The German auto industry and the economy minister claim it indicates a “fatal signal” to free and rules-based commerce
“The announcement of high tariffs on cars and car parts presents bad news for German carmakers, the German economy, the EU, and the US,” Habeck said Thursday in a translated statement.
“The EU must respond decisively to the tariffs, it must be clear that we will not back down in the face of the US. Strength and self-confidence are required,” he added.
“The announced additional US tariffs of 25% on all passenger cars and light commercial vehicles not manufactured in the US send a detrimental signal for free, rules-based trade,” Hildegard Müller, president of the German Association of the Automotive Industry (VDA), said in a statement released Wednesday.
“The tariffs, which are scheduled to take effect on April 2, will impose a significant burden on both companies and the automotive industry’s closely interwoven global supply chains, with negative consequences, especially for consumers—including those in North America,” Müller stated.
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