U.S. President Donald Trump on Wednesday turned his earlier threat into action by signing an executive order imposing 25 percent tariffs on all imported vehicles.

Ursula von der Leyen, president of the European Commission, gives a press statement on EU countermeasures to U.S. tariffs in Strasbourg, France, March 12, 2025. [Photo/European Union handout via Xinhua]

The move has sparked a wave of criticism across Europe, prompting political leaders, experts, and industry representatives to call for countermeasures. They have also urged the strengthening of trade ties with other partners to help offset the impact of rising tariffs.

Widespread opposition

Emphasizing the importance of the transatlantic partnership and free trade as pillars of prosperity for both Europe and the United States, Hildegard Mueller, president of the German Association of Automotive Industry, described Trump's decision as "a disastrous signal for free and rules-based trade."

Mueller's remarks echo the widespread criticism and mounting tensions in transatlantic relations, which were further inflamed by Europe's strong backlash on Thursday.

Starting April 2, the previously low tariffs on car imports between the two allies will no longer apply, with rates set to rise sharply. The move follows Trump's claim that the European Union's trade surplus with the United States -- especially in the automotive sector -- is excessive.

French President Emmanuel Macron called the additional tariffs both economically and geopolitically misguided. He also questioned the timing of the move, pointing to the irony that longstanding U.S. allies were the first to be targeted. "There is a kind of paradox in seeing the United States' main allies being the first to be taxed," he said.

Jose Lopez-Tafall, director general of the Spanish Association of Automobile and Truck Manufacturers, described the tariffs as "clearly negative," warning that they pave the way for "an economic confrontation" between both sides.

"The new U.S. administration is adopting an increasingly confrontational approach toward its trading partners," said Sonali Chowdhry, a trade expert at the German Institute for Economic Research. She noted that the new auto tariffs target a highly globalized industry and are certain to disrupt complex international supply chains.

The Czech Automotive Industry Association also voiced its "serious concern" over the disruption the duties could cause to the economies of European manufacturers and suppliers, warning that the tariffs threaten their global competitiveness.

Tariffs threaten both sides of the Atlantic

Experts widely agree that the rising tariffs will inflict economic damage on both Europe and the United States. The resulting surge in costs is expected to be passed directly on to U.S. consumers, fueling inflation, while also dampening European exports and leading to potential job losses across the continent. Moreover, many U.S.-built vehicles depend heavily on components sourced from Europe.

"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 percent decline in German foreign trade in 2025. "We will now revise this forecast significantly downward," Jandura added.

The impact of the tariffs is expected to hit German carmakers particularly hard, as a substantial share of their exports is destined for the U.S. market.

According to Germany's Federal Statistical Office, around 3.4 million new German vehicles were exported in 2024, with the United States accounting for 13.1 percent of the total.

The United Kingdom is also likely to be heavily affected, as the United States is its second-largest market for car exports after the European Union. British Chancellor of the Exchequer Rachel Reeves said talks would be held between the two countries to forge a better trade relationship. "Trade wars are no good for anyone, and Britain does not want to escalate this conflict," Reeves said.

An Italian study by Marco Simoni, a political economist at Rome's LUISS University, forecasts that the U.S. economy could contract by 2-3 percent due to the tariffs. The study also predicts that the unemployment rate could rise by three percentage points between 2025 and 2032, while inflation may increase by 4 percent over the next two years.

Retaliatory measures on the way

European Commission spokesperson Olof Gill warned on Thursday that the EU is preparing "robust" and "well-calibrated" countermeasures.

"We have this announcement on cars. Next week, we understand that a new suite of measures from the U.S., what they're calling their reciprocal tariffs, will come into force. We regret all of these, but we are preparing for all of these," Gill said.

German Economics Minister Robert Habeck noted that the U.S. tariffs were "not a surprise," adding that the European Commission had coordinated closely with EU member states in anticipation of such moves. "We will not back down to the U.S.," he emphasized.

French Finance Minister Eric Lombard said the EU's only viable response is to impose higher tariffs on U.S. goods. A list of targeted American products is currently being finalized and is expected to take effect in mid-April.

Bernd Lange, chair of the European Parliament's Trade Committee, suggested that retaliatory measures could include targeting major U.S. tech companies such as Google, Amazon, and Netflix, which maintain extensive customer bases and market influence in Europe. He proposed that digital services should be considered for additional tariffs.

This stance echoes recent remarks by Dirk Jandura, who issued a statement titled "Foreign Trade Demands Tough Countermeasures." In it, he urged the EU to respond decisively to what he called Washington's unilateral and rule-breaking actions.

He also emphasized the importance of addressing the dominant position held by American digital corporations in the European market.

Expanding partnerships beyond U.S.

Beyond retaliatory measures against the United States, experts have called for deeper cooperation with other trade partners to help offset the negative impact of rising tariffs.

Sonali Chowdhry argued that the EU's long-term economic growth and resilience will depend on strengthening trade both within the European single market and with other free trade partners, in order to diversify export destinations.

"It is beneficial for us to move more decisively toward regions where cooperation is possible. One example is China," said Ferdinand Dudenhoeffer, a prominent German automotive expert and director of the Center for Automotive Research (CAR).

He suggested that the automotive sector should place greater emphasis on international platforms such as the upcoming Shanghai Auto Show.

Speaking to Xinhua, Mario Boselli, chairman of the Italy China Council Foundation, said that Trump's return to the White House, combined with a lack of cohesion within the EU, could further disrupt global economic and trade dynamics. These shifts, he suggested, may prompt Europe to reassess its external economic strategy, with deeper cooperation with China representing "a highly strategic choice."

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