Volkswacht Bodensee - European carmakers warn against EU-US trade war

Trump, who will be sworn in on Monday, has repeatedly threatened to hike tariffs on European products, as well as goods made by China and other allies like Canada.

"If we end up in a trade conflict, our clear assessment is that would be significantly economically harmful to the EU and to the European auto industry," warned Ola Kallenius, Mercedes CEO and new president of the European Automobile Manufacturers' Association (ACEA).

In a letter to European Commission President Ursula von der Leyen, the European automotive lobby urged the EU to "try to avoid a potential trade conflict".

"The more free and open the markets are, the better for the European auto industry," Kallenius told reporters, pointing to trade with United States and China.

For German auto giant Mercedes, the US market represented around 15 percent of its global car sales in 2024.

ACEA repeated its call Thursday for the European Union to be "flexible" in its scramble to cut greenhouse gas emissions.

European carmakers are especially opposed to potential fines the EU could impose if they fail to meet 2025 emissions reduction targets.

The struggling industry has also faced difficulties selling electric cars and has called for support measures rather than financial penalties.

- 'Existential' risk -

In an interview with AFP, ACEA director general Sigrid de Vries warned the risk was "existential" for the industry as many manufacturers have announced job cuts in Europe.

"We cannot just live on financial services or other services. We need a manufacturing industry footprint. We need innovation here and we need also to be able to export to other regions," de Vries said.

"You cannot just have targets on paper and being very rigid about it, you need to add some flexibility to adjust for real world conditions," she said.

De Vries also said the electric vehicle market was "not developing as it should be".

Von der Leyen promised to launch talks with the sector in the coming weeks, and the EU's industrial chief, Stephane Sejourne, was in the German southwestern city of Stuttgart Thursday to hear the industry's concerns.

Environmental groups however fear the commission will unravel parts of the Green Deal, the EU's ambitious climate plan that aims to make the bloc carbon-neutral by 2050.

I.Stoeckli--VB