Clarity needed for automotive
US and EU reach tariff deal, industry reacts
The US and the European Union (EU) have reached a deal on tariffs, agreeing to a 15% tariff on most exports to the US, including vehicles and automotive parts.
The deal reduces the cost of shipping vehicles and parts from the EU to the US from a rate of 27.5% (a base tariff of 25% plus 2.5% for non-USMCA compliance) to 15%. While this will be a relief for the automotive industry compared to the threatened higher rate, it is still much more than the average 1.5% tariff on exports to the US that was previously in place before the Trump administration. It’s also not the hoped for zero-for-zero tariff deal that the EU was attempting to reach.
The agreement also means that automotive exports from the EU will still be taxed higher than those from the UK, which has a 10% tariff, but the UK’s automotive goods have a cap of 100,000 vehicles annually, while the deal for the bloc doesn’t yet contain this threshold.
In response to the deal, industry lobby group European Automobile Manufacturers Association (ACEA), which represents 16 OEMs including BMW, Daimler Truck, Ford of Europe and more, said many elements still need to be clarified.
“The agreement takes an important step towards easing the intense uncertainty surrounding transatlantic trade relations in recent months, and ACEA welcomes this development in principle,” Sigrid de Vries, director general of ACEA said. “Nevertheless, the US will retain higher tariffs on automobiles and automotive parts, and this will continue to have a negative impact not just for industry in the EU but also in the US.”
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The industry lobby group added that is will examine the details as they become available and assess the implications for Europe’s vehicle manufacturing. In a statement, it added: “The EU and the US should focus on reducing obstacles to vital transatlantic automotive trade, paving the way for stronger economic ties and shared prosperity.”
OEMs represented by ACEA
- BMW Group
- DAF Trucks
- Daimler Truck
- Ferrari
- Ford of Europe
- Honda Motor Europe
- Hyundai Motor Europe
- Iveco Group
- JLR
- Mercedes-Benz
- Nissan
- Renault Group
- Stellantis
- Toyota Motor Europe
- VW Group
- Volvo Group
