Auto Shock: Trump’s 25% Tariff Sends Europe Reeling
The “Trump Tariffs” continue to shock global markets, affecting multiple major sectors. Recently, European auto manufacturing ombudsmen reacted with alarm to President Donald Trump’s imposition of a 25% import tariff on auto imports into the United States.
EU Auto Leaders React to Trump Tariffs
Hildegard Müller, president of the German Association of the Automotive Industry, said in an April 3 statement, “This protectionism will only produce losers. Consumers in the US will be particularly affected, as they will directly feel the effects of the additional tariffs through rising inflation and a reduced product selection.”
On April 2, Trump officially announced the import duties on all automotive imports into the United States, which took effect starting on April 3. Müller added, “The consequences of the 25% tariffs, which will be imposed on passenger cars, light commercial vehicles and certain auto parts starting April 3, are still difficult to assess. However, it is already clear that this development will have negative effects on economic growth worldwide. This will also affect jobs.”
She went on to say, “The EU is now called upon to act with unity and strength, while at the same time continuing to signal its willingness to negotiate. The EU can and must act confidently and put all options on the table.” One trader expressed real surprise at the tariffs, telling MetalMiner, “Nobody could even imagine that this would happen,.”
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Europe’s ACEA Urges a Fast Resolution
Meanwhile, the European Automobile Manufacturers’ Association (ACEA) expressed a similar sentiment to the VDAs, calling for a quick resolution to trade tensions between the EU and the United States.
“We urge our leaders to meet…so that they can find a solution to any issues preventing free and fair trade between historic allies and allow the EU-U.S. relationship to flourish once again,” the ACEA said in an April 3 statement.
The United States is EU automakers’ second largest export market by volume following the United Kingdom. Citing Eurostat as its source, the ACEA stated that the EU exported almost 750,000 new automobiles to the United States in 2024. While that volume represents a 6.2% decline on the year from almost 800,000 new units, it is nonetheless 16.5% of total exports.
Meanwhile, the U.S. is the leader in export trade value, with Eurostat data showing it accounted for 24.9% in 2024, at €38.5 billion ($42.7 billion). This is a decline of 4.6% from the €40.3 billion ($44.8 billion) seen in 2023.
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Analyzing Export Volumes
The latest export volumes to the United States also comprised about 6.58% of overall production by the EU’s top 10 automakers (Germany, Spain, Czech Republic, Slovakia, France, Italy, Hungary, Romania, Belgium and Sweden). Using data from S&P Global Mobility, the ACEA showed that this exceeded 11.4 million units in 2024. That volume was also off 6.2% from about 12.2 million units in 2023.
“The current drop is a result of supply and demand realignment, following a phase of catch-up driven by sales backlogs and inventory replenishment,” the ACEA noted.
One trader also did not rule out the possibility that the Trump tariffs could have flat-rolled steel prices facing some downward pressure points in the short term. “I believe there will be an impact, but it should be manageable,” they told MetalMiner, referring to the percentage that U.S.-bound exports covered.
The tariffs could potentially impact the steel sector as the EU automotive sector is also the second-largest steel-consuming sector at 17%. About 90% of steel used by the automakers comes from local steelmakers.
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Some Traders See the Tariffs as a Real Threat
In late March, hot rolled coil in northern Europe transacted at €640-650 ($710-717) per metric ton EXW. There was also a report that ArcelorMittal was seeking €700 ($770) on flat rolled coil due to the EU seeking higher tariffs on steel imports. However, the source believed buyers would not pay more than €660 ($730).
One of HRC’s applications is feedstock for the production of cold rolled coil, which commands an average premium of about €100 ($110) per metric ton over the former. This CRC serves as feedstock for hot dipped galvanized production, commonly used in autobody manufacturing.
HDG commands a €90-250 ($100-275) premium over CRC, depending on zinc’s market value. The London Metal Exchange’s three-month closing price was $2,780 per metric ton on April 2, down 6.44% from $2,972 on March 25.
MetalMiner’s source stated that one possible option to protect against the Trump Tariffs would be for the EU to set up trade agreements with other entities, such as sovereign states or trading blocs, the trader opined. “I think that the biggest impact will be to the U.S. economy, which could start to crumble as a result,” the trader added.
