European car parts industry faces crisis amidst us tariffs
The automotive sector encompasses not only car manufacturers but also, and perhaps more importantly, manufacturers of car parts. Until recently, the USA was the sole reliable market for European producers; now, however, only uncertainty remains.
Donald Trump is adhering to the "America First" policy, and his dynamic tariff strategy raises significant concerns within the car parts manufacturing sector. He has already affected the export of aluminium and steel, materials crucial to the automotive industry. The Trump administration might impose further tariffs, and if that occurs, the European automotive sector, especially parts manufacturers, will find themselves in a challenging situation.
25% tariffs lead to concrete losses
For the average person living in Europe, a 25% tariff might seem irrelevant. At most, things may become slightly more expensive. However, behind this figure lies a genuine threat: the potential loss of 125,000 jobs, a decline in exports by billions of pounds, reduced investments, and another blow to supply chains. Benjamin Krieger from CLEPA (the European Association of Automotive Suppliers) does not hide the fact that suppliers might feel this impact more acutely than final producers.
In recent years, Europe has been losing access to markets due to the war in Ukraine, tensions with China, and inflation. For a long time, the United States remained a relatively dependable partner. If this foundation also begins to waver, the industry could find itself in a truly disadvantageous position.
According to CLEPA data, six out of ten companies already regard the geopolitical situation as negative for their business, and 42% do not expect profitability this year. It's no wonder, given that costs are rising and risks are multiplying every month.
It's understandable that the European Union might be tempted to retaliate, but parts manufacturers suggest that instead of reacting emotionally, a calm and calculated approach is necessary. Europe cannot afford rash decisions. A well-thought-out strategy is crucial for securing the interests of the industry without severing ties with key partners.
Tomasz Beben, president of the Association of Distributors and Manufacturers of Automotive Parts (SDCM), expressed strong opinions:
A new trade war could either be a turning point or a death knell for European industry. It all depends on how swiftly and boldly the EU decision-makers respond. The year 2025 is the industry's final chance. As SDCM points out in its press release, resilience is not something that arises on its own—it requires deliberate action, a well-defined plan, and timely collaboration to be effectively developed.
