Trump invoices for cars will hit Europe hard

After months of threats, the White House presented the plans on Wednesday to impose invoices on cars imported to the United States, a plan that is likely to hit car companies across the European Union.

The move – which would place a 25 percent invoice on all cars that were not built in the United States – could increase pressure on Europe to respond to countermeasures.

European Union officials have already announced plans to allow invoices established during the first term of President Trump to return to their place and said they would place a new set of invoices in a wide variety of US goods-from underwear.

But these measures were an answer to steel and aluminum invoices. And their first wave, intended to hit American whiskey and motorcycles, delayed to allow more negotiation time and beyond fears of an intense American response that could crush European wine and champagne exports.

The latest US move can intensify the urgent need for the European Union to react. Car invoices could get an industry that is already vulnerable-especially to Europe’s largest economy, Germany, which sends US consumer cars from companies such as Volkswagen, Mercedes-Benz and BMW. This makes invoices a serious escalation in a trade war that has already let Europe mix.

“I am deeply sorry with the US decision to impose invoices on European car exports,” said Ursula von der Leyen, President of the European Commission, an executive arm of the European Union.

The European Union will “evaluate this announcement, along with other measures that the United States foreseen in the coming days,” he added and “continue to seek negotiations while securing its financial interests.”

The United States is the largest European Union export market for cars, representing almost a quarter of all its exported vehicles.

In 2024, European automakers sent cars worth € 38.4 billion across the Atlantic, decreased by 4.6 % compared to the previous year, according to the European Car Engineering Association, ACEA.

The car invoices “will definitely be a big bummer for the recently returned optimism in Europe,” said Carsten Brzeski, Macro’s world leader for research. In particular, they could “harm German exports and increase the chances of continuing stagnation”.

The largest three German motorists account for about 73 % of European Union exports to the United States, according to research firm Jato Dynamics.

And the United States is the most important export market for Germany’s car industry. Almost one of the three Porsches is exported to the United States, while one of the six BMWs is sent there. Mercedes, Volkswagen and Audi (a subsidiary of the Volkswagen Group) have production areas in the United States and Mexico, but would get hard from increasing invoices.

BMW warned this month that it is expected that growing trade conflicts will cost the company $ 1 billion this year.

“If you overdo it with invoices, it sends a negative spiral to all market participants,” Oliver Zipse, president of BMW, told Bloomberg. There are no “winners in this game”.

Cars are only a sector that faces abrupt prices increases. In addition to steel and aluminum invoices, the United States is planning to announce what the administration calls “mutual” invoices next Wednesday.

The goal, according to the administration, is to balance the invoices between the various nations and America.

Maros Sefcovic, Commissioner for the European Commission, and Bjoern Seibert, head of the Council of Ministers for the President of the Commission, visited Washington on Tuesday to talk to their US counterparts – Howard Lutnick, the Secretary of the Trade and Jamieson Greer.

On Wednesday, European ambassadors heard an account of these meetings, according to three diplomats who spoke about the condition of anonymity because the talks were private.

The route was that mutual invoices could be in double digits, two of the diplomats reported – perhaps even 20 percent or higher, one was added, although the number was uncertain and the range of estimates wide. Invoices would be applied to all areas for EU countries.

“EU priority is a fair, balanced agreement instead of unjustified invoices,” Mr Sefcovic told X after his meetings this week. “We share the target of industrial power on both sides.”

Although the European Union has a relatively low invoice on average, the United States have marked that they would take into account other factors in calculating mutual invoices-including value added taxes. These are the consumption taxes added to a good or service at each production stage and are given back to the exporter if a product is exported. Mr Trump was a long -term critic of these policies.

Mr Trump said, announcing cars on Wednesday that the next mutual invoices would be “lenient” and that “we will be very fair”. Offered a few specific details.