April 2, 2025 – President Donald Trump has ignited a fierce backlash from Europe by signing an executive order imposing a 25% tariff on all imported vehicles. The move, effective immediately, has prompted European leaders, industry experts, and automotive associations to voice strong opposition and consider countermeasures.
Europe Calls for Countermeasures
Hildegard Müller, president of the German Association of the Automotive Industry, described the decision as “a disastrous signal for free and rules-based trade.” She emphasized the importance of the transatlantic partnership and warned that the tariffs threaten prosperity on both sides of the Atlantic.
French President Emmanuel Macron criticized the tariffs as “both economically and geopolitically misguided,” questioning why longstanding U.S. allies were the first targets. “There is a kind of paradox in seeing the United States’ main allies being the first to be taxed,” Macron said.
Industry Concerns Over Economic Impact
José López-Tafall, director general of the Spanish Association of Automobile and Truck Manufacturers, warned that the tariffs pave the way for “an economic confrontation” between Europe and the United States. He labeled the move as “clearly negative” for the industry.
Sonali Chowdhry, a trade expert at the German Institute for Economic Research, noted that the automotive industry is highly globalized. “The new U.S. administration is adopting an increasingly confrontational approach towards its trading partners,” she said. “These tariffs are certain to disrupt complex international supply chains.”
Potential Fallout for Both Sides
Experts agree that the rising tariffs will inflict economic damage on both Europe and the United States. The increased costs are expected to be passed on to U.S. consumers, fueling inflation. European exports may suffer, potentially leading to job losses across the continent.
“A trade war has no winners,” said Dirk Jandura, president of the Federation of German Wholesale, Foreign Trade and Services. The trade body had previously projected a 2.7% decline in German foreign trade in 2025. “We will now revise this forecast significantly downward,” Jandura added.
Impact on U.S. Consumers and Automakers
The tariffs could add thousands of dollars to the cost of an average vehicle in the United States, contradicting President Trump’s campaign promise to lower consumer prices. Luxury carmaker Ferrari has already announced price hikes of up to 10% for cars sold in the U.S., and other automakers may follow suit.
Tesla’s Position Amid Tariffs
While some analysts suggest that Tesla may fare better due to its domestic production in Texas and California, Tesla CEO Elon Musk refuted this notion. “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant,” Musk posted on social media platform X.
Daniel Ives, an auto industry analyst at Wedbush Securities, commented, “Tesla is the one least impacted among U.S. carmakers,” but acknowledged that the industry as a whole faces challenges.
