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European carmakers have referred to as on Brussels to strike a “grand bargain” with Donald Trump, asking lawmakers for an pressing evaluation of what the incoming US president needs to keep away from a bruising commerce warfare.
Acea, the European automotive business physique, on Thursday despatched a letter to EU leaders urging them to not retaliate in opposition to Trump’s threatened tariffs.
“The EU should seek a grand bargain with the US and attempt to avoid a potential trade conflict,” the letter, despatched to the European Fee, European parliament and all 27 member states, mentioned.
Trump pledged a blanket tariff of as much as 20 per cent on all US imports through the presidential marketing campaign, weighing on the European automotive business at a time when it’s grappling with the pricey transition to electrical autos and the rise of Chinese language competitors.
Greater than a fifth of EU automotive exports go to the US.
At a information convention, Ola Källenius, chief government of Mercedes-Benz and new president of Acea, referred to as for “a strong sense of urgency” for the EU to seek out room to barter with the incoming Trump administration.
“Make a thorough analysis of what the other side needs to do,” he mentioned. “The blunt instrument of just simply raising tariffs stifles growth.”
The EU already imposes a ten per cent tariff on all automotive imports. Fee officers say they’re open to negotiation, however are ready to retaliate in opposition to any US measures.
Regardless of fierce lobbying by member states to not enter a commerce warfare, Brussels believes it might be essential to hit again in opposition to the US president-elect. Throughout Trump’s first time period, either side levied tariffs masking a whole lot of hundreds of thousands of {dollars} in commerce.
Acea’s letter additionally requested for a de-escalation with China, a giant market, after the EU imposed tariffs of as much as 45 per cent on Chinese language EVs for alleged unfair subsidies.
“It is essential to recognise that trade with China and the US is the most vital for the prosperity of the European economy,” it added.
Some EU carmakers are actually partly or wholly Chinese language owned. Geely and SAIC, which is managed by the Chinese language state, personal a fifth of shares in Mercedes-Benz.
Trump has attacked Germany for exporting automobiles to the US however importing only a few US-made fashions. Some 738,436 autos had been exported from the EU to the US in 2022, in opposition to US 271,476 autos imported to the EU over the identical interval.
European carmakers, which have factories in all three territories, worry a three-way commerce warfare that may damage exports simply as EU market demand stagnates.
Acea mentioned it could be higher to extend the “resilience” of the business than use protectionist tariffs.
It as soon as once more requested the fee scrap fines that will likely be levied this 12 months for failing to adjust to a legislation limiting emissions. Slowing EV gross sales — down 6 per cent in 2024, based on provisional figures — made them unattainable to hit, Acea mentioned.
Corporations will face billions in fines or must pay Chinese language and US producers resembling BYD and Tesla to “pool” emissions credit, since an even bigger share of their vary is electrical.
A number of EU leaders and European parliament members have additionally referred to as for the fines to be dropped or reinvested in analysis by the businesses.
Acea mentioned it nonetheless backed a ban on the sale of automobiles with combustion engines by 2035 however wanted authorities assist to conform.
Based on preliminary figures launched by Acea on Thursday, EVs made up about 13 per cent of latest automobile registrations final 12 months, properly beneath the 25 per cent policymakers had anticipated when the EU targets had been set 5 years in the past.
“If you work against market conditions and natural demand, it has an economic cost,” Källenius mentioned. “There must be some recognition of these market conditions to create relief.”
