The European Automobile Manufacturers’ Association (ACEA) has called on EU leaders to prioritize strong trade relations with both the US and China.
In an open letter, European carmakers like BMW and Mercedes-Benz urged the European Commission to negotiate a “grand bargain” with incoming US President Donald Trump. Their goal is to shield the European car industry from escalating trade tensions.
Trump, who will assume office on Monday, has announced plans to impose significant tariffs on Chinese imports. Concerns are mounting that his administration may penalize countries maintaining strong trade ties with China.
ACEA has stressed the importance of keeping trade with both nations open, as they play a vital role in the success of Europe’s car industry.
ACEA Calls for Pragmatic Solutions
Ola Källenius, the newly elected ACEA president, highlighted the need for balanced trade policies to avoid market disruptions.
He stated, “China and the EU must focus on strengthening their internal markets while maintaining global supply chains. Cutting off access or raising barriers jeopardizes jobs and established economic systems.”
Källenius praised EU and Chinese leaders for their efforts to resolve the ongoing EU anti-subsidy case and emphasized the urgency of reaching a positive outcome.
The ACEA warned against protectionist policies, noting that trade wars result in losses for all involved. “A level playing field benefits everyone, but imposing barriers often leads to unnecessary harm,” Källenius added.
Challenges for Europe’s Automotive Industry
The European car sector faces increasing challenges, especially from subsidized Chinese competitors offering cheaper and feature-rich vehicles.
This competition has prompted the EU to impose higher tariffs on Chinese electric vehicle (EV) imports, a move opposed by German automakers fearing retaliation. Major German brands, including BMW, Volkswagen, Audi, and Mercedes-Benz, rely heavily on operations in China.
Chinese incentives, such as tax breaks and affordable land, have further strengthened the country’s appeal to European manufacturers. However, potential retaliatory tariffs from China could severely impact the European car market.
Volkswagen has already divested its Xinjiang operations, citing economic considerations. With China as a critical market for European automakers, maintaining balanced trade relations is essential to securing the industry’s future.
