The European Union is yet to issue an effective and material response to the imminent 25% tariffs the US has imposed on car imports. The tariffs also include car parts. Countries which will be severely hit by these tariffs include Mexico, Korea, and Japan, but Germany is also set to face a significant hit. In a press conference following the signing of his executive order, President Trump also said that the tariffs will be permanent.
Daimler AG which owns the Mercedes brand is set to face a significant hit given it derives up to 23% of its sales from the US. Both BMW and Daimler have manufacturing plants in the US but these plants are focused mostly on assembly with the engines being produced in Germany. Tariffs will also hit the engine parts coming into the US.
In 2023 the EU exported up to €40 billion of cars to the US and up to €56 billion in total vehicles and parts. In turn the US exported to Europe only up to $7.8 billion of cars in 2023. European car exports to the US form a core item of European exports to the US, being the third most exported item from Europe to the US in trading volume.
US car and vehicle suppliers have stated that car prices will inevitably go up as a result of tariffs. The tariffs will go into effect on April 3rd.
Newsroom
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