US President-elect Donald Trump’s threatened tariffs on auto imports could severely impact Europe. An analysis by the consulting firm Kearney, reported by the “Spiegel”, reveals the devastating effects on the European automotive industry.
According to the analysis, Volkswagen, Mercedes-Benz, BMW, and Stellantis (Peugeot, Fiat, Chrysler), with significant US businesses, as well as the 1,000 largest European suppliers, could face up to 25,000 job losses, despite some manufacturers having US production facilities.
“Around 640,000 vehicles are exported from Europe to the US each year – depending on the scenario, the tariffs could lead to a loss of $3.2 to $9.8 billion in revenue for the manufacturers, which would, in turn, affect the suppliers” explained Kearney partner Nils Kuhlwein.
In a first scenario, the tariffs are fully passed on to US customers. The calculation shows that a 10%, 15%, or 20% tariff could lead to a decline in demand for imported vehicles by 60,000 to 185,000 units. This would result in a maximum revenue loss of $9.8 billion for the manufacturers and up to $7.3 billion for suppliers.
If the auto manufacturers instead pass the tariffs on to their suppliers, the latter’s results could decline by up to €3.1 billion, or 25,000 jobs, if the additional costs are passed on at a rate of 60%, according to Kuhlwein.