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The European Union May Be Safe From Automotive Tariffs

We hope this news turns out to be true.

President Trump has been pushing for a 25% tax on foreign steel and aluminum, which would greatly impact the automotive industry. The tariffs could deliver a massive blow to foreign automakers, particularly German automakers, who control 90% of the luxury market in the US. So far, President Trump has been firm in his resolve, but an Automotive News report indicates that the European Union may be spared from the looming tariffs.

The US ambassador to Germany reportedly reached out to executives from Daimler, Volkswagen and BMW to inform them that Trump may be willing to abandon the tariffs on the EU. Trump would drop the tariffs if the EU was willing to make a deal, and annul its foreign duties on US-built cars. The German Association of the Automotive Industry said "it is clear that the negotiations are exclusively being held at a political level," which is a positive sign. Trump's tactics have sparked fears of a global trade war, but this news gives us hope that concessions can be made, at least with the EU.

These negotiations will have a massive impact on the automotive industry, as German automakers try to convince Trump that tariffs could cause damage to global free trade. It seems as though the EU could solve everything by just caving into Trump's demands, but the EU is not allowed under global rules to decrease its 10% tariff on American cars without a bilateral accord with the US or an agreement with the World Trade Organization as a whole. Although the EU seemingly has a way out of these tariffs, it may not result in the deal Trump has been seeking.

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