Trump has
threatened a further 10% tariff on goods imported from the UK, Denmark,
Finland, France, Germany, the Netherlands, Norway and Sweden from February 1,
rising to 25% in June, if the countries continue to oppose the US takeover of
Greenland.
If the
threat is followed through, it could spell further disruption to the global
automotive supply chain, especially as European countries are considering
hitting back with €93bn ($10.8bn) worth of tariffs on US goods. The EU
first prepared the tariff list last year following Trump’s ‘Liberation Day’
levies, but the strategy was put on hold until February 6 to avoid a trade war.
European
Commission president Ursula von der Leyen said: “Tariffs would undermine transatlantic
relations and risk a dangerous downward spiral.”
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The US
trade deal on tariffs with the EU that was agreed upon last year, which would
see the EU drop tariffs to 0% and the US drop tariffs from 27.5% to 15%, has
not been legally approved yet, having previously been put on hold. The European
parliament is due to vote on the deal in the next two months, but now
government officials in Europe are looking to put it on hold again.
What
Trump’s latest tariff threats mean for automotive logistics and supply chain
What this
means for the automotive industry is as yet unclear but will certainly have a
negative effect. Ahead of the February 1 deadline, shipments are likely to be
front-loaded and accelerated, and again for the June tariff deadline,
especially for high-value shipments like finished vehicles, engines, battery
components, semiconductors and electronics.
If OEMs
pull forward volumes, there will likely be short-term booking spikes and a
temporary surge in transatlantic shipments, with tightened availability on peak
sailings and greater use of premium services for critical components.
Ro-ro
shipments are especially sensitive to tariff changes as capacity is less
flexible and terminal space is constrained, meaning rate volatility.
Borders and
customs are likely to experience bottlenecks and compliance costs for shippers
are likely to increase. Even if ports keep moving, the compliance admin fees will
continue to rise. This could lead to an increase in demand for foreign trade
zones (FTZs) and bonded warehouses while shippers attempt to calculate tariff fees
and defer payments.
If the
ratification of the EU-US trade deal is further postponed, tariffs could
increase even further with potential escalation of a full trade war. The International
Monetary Fund (IMF) has said that whatever the ultimate level of tariffs ends
up being, the uncertainty itself will mean investments are postponed and costs
increase – a sentiment that has been echoed
by automotive logistics and supply chain leaders.
According
to the latest figures published by the European Automobile Manufacturers’
Association (ACEA), the US accounted for 22% of the EU export market in 2024.
The EU’s automotive exports to the US in 2024 included approximately 750,000 finished
vehicles worth around €38.5bn ($43.5bn), while US automotive exports to the EU
in the same year included around 165,000 vehicles worth €7.7bn ($8.8bn).
Carmakers that
export from Germany, such as BMW, Mercedes-Benz and VW are particularly
exposed, as well as exporters from Sweden (Volvo Cars), the UK (JLR) and France
(Stellantis brands).
Suppliers
including Bosch, ZF, Continental, Valeo and Forvia could also be at risk as
they export from Europe to the US.
Ports in
the US would also feel the effects of further tariffs, particularly the busy
ports of Baltimore, Brunswick, Charleston and Newark. Tariffs often trigger
short, intense booking surges followed by pauses by importers, leading to yard
congestion and dwell time pressure followed by underutilisation.
Why
Greenland matters to automotive logistics and supply chains
Greenland
is an autonomous territory of Denmark and is increasingly important in trade,
as it is located between Europe and North America and melting ice due to global
warming means that shipping routes are opening up around Greenland. UK prime
minister Keir Starmer said: “As sea routes open, and strategic competition
intensifies, the high north will require greater attention.” He added that the
use of tariffs against NATO allies is “completely wrong” and said that “a
tariff war is in nobody’s interests”.
While the
threats and debate continue, the US Supreme Court is set to decide whether Trump’s
tariffs are even legal. The decision could come as early as this week, having previously
been expected on January 14.
