27/3/2025 |Articles are machine translated
Illustrative photo. | Photo: Thierry Monasse
The Automotive Industry Association expresses its serious concern about the announcement by the US President to impose additional tariffs of 25% on all non-US manufactured vehicles. These duties, which are due to come into force on 3 April, pose a direct threat to the economy of European manufacturers and suppliers, disrupting global supply chains and threatening their competitiveness at a time when the automotive industry is facing a major transformation and increasing international competition. At the same time, they send a disastrous signal for rules-based free trade and will also have a negative impact on consumers, including those in North America.
The United States of America is not a key export market for the Czech automotive industry. In 2023, only 0.8% of Czech automotive exports worth CZK 9.3 billion were destined for the USA, and the Czech Republic does not export finished vehicles. The announced increase in tariffs will nevertheless have a significant impact on a number of Czech suppliers of parts and services, especially those supplied to German customers, and will thus mean a significant reduction in export opportunities and loss of orders for them.
The Czech automotive industry is strongly export-oriented. It is closely linked to the European market, especially to the German market, where 29.4% of Czech exports are directed. Additional tariffs would therefore have an impact mainly indirectly, by reducing demand for Czech parts and sub-supplies used in vehicles exported from the EU to the US. In particular, German premium vehicles are an important category here. If the trade war escalates further and tariffs are imposed on other sectors, estimates show that across-the-board US tariffs could reduce EU GDP by between 1 and 2.5% and lead to the loss of up to several million jobs.
At this point, it remains unclear whether the US tariffs will only apply to finished vehicles or whether they will also affect key automotive parts – such as engines, transmissions, drivetrain parts or electrical components. According to the White House statement, the tariffs would also apply to these parts, starting no later than 3 May 2025. These components represent a significant part of the exports of many European and Czech companies, and their inclusion in the tariff measures could significantly deepen the economic impact of this decision. The German Association of the Automotive Industry (VDA), for example, reports that 86% of SMEs in the sector expect to be affected by the tariffs in some way, and up to a third of companies directly.
The escalation of trade tensions between the United States and the European Union is further complicating an already difficult situation in the sector. It will further exacerbate tensions and uncertainty in supply chains, which are already negatively affected by the discrepancy between the regulatory required share of electromobility, which does not correspond to the reality of the market. But it will also have serious consequences for workers and consumers, on both sides of the Atlantic.
The Automotive Industry Association therefore calls on both administrations to avoid further escalation and to work together to find a framework solution through dialogue and partnership. It is the removal of various tariff and non-tariff barriers for automotive products, the harmonisation of regulations, standards or certifications, that will enhance efficiency and economic benefits that will benefit both sides of the Atlantic.
Both European and Czech manufacturers recognise the importance of open markets and fair competition. Stable trade relations are the basis for economic growth, prosperity and technological progress. At a time of growing global challenges, it is crucial that world leaders work together rather than create barriers.
