Europe has proposed a 0% tariff for its cars. The only problem is that they have no cars to sell us

The United States has hit first and Europe tries to defend itself through negotiation. That is what indicates the first reaction of the European Union to tariffs of 25% imposed by the Donald Trump government to cars, the pieces that compose them, steel and aluminum. Also to the 20% tariff in flat rate format that the United States has imposed on all the countries of the European Union.

The response of the European Union has been to put the table and sit down to negotiate. Europe plays the future of many sectors but the car is especially critical. According to UGTon average in Europe, 3.2% of each country’s employees work in the production of vehicles and engines or in activities associated with them such as repair or distribution and sale.

The document mentions the Draghi reportthe result of a study commissioned by the European Union to which the European Central Bank was to seek solutions to the European economic decline against emerging powers. It pointed out that in Europe there are 13.8 million people working in the automobile sector, representing 6.1% of the active population.

According to the European CommissionWe export vehicles to the United States worth 38.9 billion euros. Only the United Kingdom, who bought cars worth 34,300 million euros, rivals this country. To this we must add that a multitude of European vehicle manufacturers produce in Mexico or Canada as bridges to a cheaper entry in the United States.

Vehicle shipments affect German manufacturers to a greater extent. The group Volkswagen is stopping his deliveries in the United States and its shipments on a railroad from Mexico. Mercedes is considering reduce your offereliminating smaller models and, therefore, that report lower profit margin. BMW, for the moment, It seems that it will absorb tariffs. And Stellantis too is sending home to workers from and outside the United States to produce a lower amount of cars.

An impossible response proposal

To try to save the situation, the European Union has put on the table operate with a zero tariff for vehicles and industrial goods. In The world collect the words of Ursula von der LeyenPresident of the European Commission, who recalled that the proposition on vehicles was already made last February.

In the press conference to present the measure, from the European Commission it has been stressed that they did not obtain an adequate response. And the same has happened now. Yesterday afternoon, Donald Trump left the cameras to threaten China with raising tariffs even more and pointing out that the European proposal does not convince him.

For the president of the United States, it is not enough. “The EU has been very hard over the years. I always say that it was formed to harm the United States in commerce. That is why it formed (…) joined to create a monopoly situation, to create a unified force against the United States in trade. (…) we pay to protect them militarily and play it in commerce. So it is not a good combination,” The country.

The problem for Europe is that The commercial deficit of the United States with Europe in the purchase and sale of cars is very high and from the US government they are not willing to accept that Europe compensates for part of these losses (and other products sold to the United States) with services. In spite of everything, the balance remains positive for Europe, as is checked in this graph of eldiario.es.

According to Acea15% of vehicles exported by Europe are destined for the United States. However, the value is high because 22% of the money obtained from exports worldwide comes from the United States. Those 38,500 million euros contrast with the 7.7 billion euros that we import from the country.

By units, Europe sent 749,170 light cars to the United States while we bought 164,857 vehicles. On average, a car sold to the United States costs around 51,400 euros. Back, each car sold by the United States to Europe costs about 46,800 euros.

This explains that if the United States only wants a balanced trade balance between vehicle entry and exit is almost impossible to meet. The only proposal that came out yesterday from North America is that Europeans buy the energy produced there to compensate for the commercial deficit that the United States has in the purchase of goods.

But, in addition, there are many reasons why Europe cannot match in sales the purchases that the United States makes of our cars. First of all because of a purely cultural problem, the United States does not manufacture cars that fit with European philosophy. In general, they manufacture cars of extremely large dimensions for European cities, with larger engines and gastons than Europeans.

And not only that, the United States has encountered the problem that much of the manufacturing automobile industry has left the country to place in Mexico and Canada. Commercial treaties with these countries allow them to sell cars “to the American” producing them cheaper than within their borders.

However, Europe has been finding a productive market for each car. The highest cost (but greater profit margin) are manufactured, above all, in Germany and France where the costs are higher. The little ones occur in Spain or in countries with lax commercial treaties such as Morocco or Türkiye. Only within its borders (Germany and Poland) distortions such as the United States and Canada are produced.

The problem for the United States is that Europeans do manufacture cars that interest there, sending them from Europe or from Mexico and Canada, but they already manufacture cars that interest the Europeans themselves. The United States manufactures a type of vehicle that is not demanded in Europe and, in fact, brands such as Ford have been manufacturing vehicles that interest us locally manufacturing on our ground as the Ford Fiesta has beenthe focus, the puma or the kuga, among many others.

In fact, Ford itself is clear that the place to produce the few Ford Mustang or Ford Bronco that sells In Europe it is in the United States. And the emission regulations that Europe has on the horizon only press so that this type of cars arrives with droppers. A Ford Mustang with V8 Motor 279 gr/km of CO2. For every car of this type sold in Europe, Ford You will need to sell three electric cars If you want to escape the fines from 2027.

Photo | Ford and Sara Kurfeß

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