The import tariffs threatened by future US President Donald Trump could deal another serious blow to Europe’s already struggling car industry. According to one study, the trade barriers could cause billions in additional losses and the loss of as many as 25,000 jobs.
The study published on Thursday by management consultancy Kearney estimates the possible losses for car manufacturers at between 3.2 and 9.8 billion dollars (about 3.1 to 9.5 billion euros), depending on how high the tariffs are and whether the car manufacturers pass on the costs to the buyers or not.
VW, BMW and Mercedes are particularly affected
Volkswagen, Mercedes and BMW and their suppliers would be particularly affected by this. The German manufacturers together imported approximately 640,000 vehicles from Europe to the US. According to him, demand, especially for electric cars, is likely to collapse if tariffs are passed on to buyers. In a second scenario, suppliers in particular will suffer if producers initially pay the tariffs themselves and then pass these costs on to their suppliers. This is a common industry practice, says Kearney expert Nils Kuhlwein.
In the medium term, new tariffs could lead to further shifting of production among manufacturers, Kuhlwein continued. As a result, suppliers are likely to follow suit.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
