As the European automotive and steel industries face significant challenges, a new study has highlighted the potential for severe job losses in the European Union (EU) if President-elect Donald Trump follows through with his campaign promise to impose a 10% tariff on European products.
According to the study, the European automotive sector could lose as many as 186,000 jobs over the next decade, a stark warning about the economic fallout from the proposed tariffs.
The European automotive industry, particularly in Germany, stands to be one of the hardest hit. Volkswagen, Germany’s largest car manufacturer, recently announced the closure of three plants as part of its shift to electric vehicle (EV) production.
However, the additional burden of tariffs could further destabilize the industry, exacerbating the already complex transition to cleaner technologies.
Simon Schuetz, spokesperson for the Association of the German Automotive Industry (VDA), expressed urgent concerns to Euronews, stressing the need for dialogue between the EU and the US to avoid escalating tensions.
“I think that both sides need to talk to prevent this. If it does, we both know what will happen next. And the European Union will probably have some measures in response, and that would be the start of another trade conflict or something of that kind,” Schuetz said.
He emphasized the importance of cooperation between Europe and the US, particularly as geopolitical challenges continue to mount. “Politics and economics need to be considered together,” he added, calling for a more diplomatic approach to avert further economic strain.
The automotive industry is not alone in its struggles. The European steel sector is also facing the looming threat of further trade barriers.
The US’s imposition of tariffs on steel and aluminium under the previous Trump administration has already led to a significant slump in exports, and the issue remains unresolved.
Axel Egger, Director General of the European Steel Association (EUROFER), expressed concern that ongoing delays in negotiations could result in the re-imposition of a 25% tariff on European steel, a measure that would deepen the crisis.
“A way forward had been agreed upon between Joe Biden and the European Commission under Ursula von der Leyen to address the trade conflict concerning steel, as well as a global arrangement on sustainable steel and aluminum,” Egger told Euronews.
However, he added that the negotiations have stalled due to the upcoming US elections, leaving the steel industry uncertain about the future.
The steel industry is also under pressure to align with climate goals, as the manufacturing of steel and aluminium is among the highest carbon-emitting industries worldwide.
This complicates negotiations, as both the US and EU seek ways to balance trade relations with environmental priorities.
With both industries facing an uncertain future, the stakes are high for the EU economy. If Trump proceeds with his tariff plans, it could trigger a chain reaction of retaliatory measures and trade disputes, further undermining the EU’s economic stability.
For now, industry leaders are calling for continued talks to prevent a full-blown trade war and ensure a more sustainable and cooperative future for transatlantic trade relations.