25% Tariffs Hit EU Auto Exports – Here’s What to Do Now

How New US Tariffs Will Impact Automotive and Export-Driven Businesses

The latest US tariffs on European automotive exports signal a sharp escalation in ongoing trade tensions between the United States and the European Union. For companies across DACH and the UK — especially in automotive, industrial goods, and machinery — the consequences are immediate and potentially significant.

The new tariffs are part of a wider programme of “reciprocal tariffs” targeting global exporters, with the EU facing a 20% average rate and specific 25% duties on automotive goods. These measures, effective from April 5, signal a renewed period of global trade volatility. 

With tariffs ranging from 10% to 25%, the Trump 2.0 administration aims to correct perceived trade imbalances and boost domestic production. But for European exporters, this means mounting costs, disrupted operations, and intensifying uncertainty — especially for businesses already facing supply chain instability and inflationary pressure.

Are You Exposed? 

The EU’s automotive sector is highly vulnerable. Germany and Italy are among the top exporters of vehicles and parts to the US, making them especially exposed to rising trade barriers.

Germany alone sends around 10% of its exports to the United States, much of it tied to automotive, machinery, and transport equipment. Major manufacturers like Volkswagen, BMW, and Mercedes-Benz could face direct losses if tariffs cause price surges, delivery issues, or loss of competitiveness.

And all of this is happening while many European manufacturers are still navigating broader geopolitical instability, carbon reduction demands, and ongoing supply chain realignments.

With US tariffs now also covering sectors like steel, aluminium, and chemicals, pressure may build across entire industrial value chains — not just automotive. 

Three Strategic Moves to Make Today

With the tariffs now in force, the time to act is now. Here are four critical areas business leaders should focus on immediately:

1. Evaluate Your Exposure

• Audit your product lines to identify tariff-affected goods
• Map supply and customer networks to assess downstream impact
• Use financial modelling tools to stress-test various scenarios
   

2. Adapt Your Supply Chain

• Diversify your supplier base to reduce regional concentration risk
• Localise production where possible, especially for US-market components
• Strengthen relationships with existing suppliers to ensure agility
   

3. Renegotiate Smart Contracts

• Clarify commercial terms on who absorbs tariff-related costs
• Initiate contract reviews with key suppliers and clients
• Explore longer-term agreements to stabilise pricing and delivery terms
   

High Stakes, Fast Decisions – Move Now

Now that tariffs are live, businesses cannot afford delay. Inaction risks real loss — of margin, customers, and resilience. The good news? Companies that act quickly can absorb the shock and gain a competitive edge.