Rudolph Angler In an open letter to EU leaders, the European Automobile Manufacturers’ Association (ACEA) stressed the importance of preserving strong trade ties with both the US and China.
Major European carmakers, including Mercedes-Benz and BMW, urged the European Commission to strike a “grand bargain” with incoming US President Donald Trump to safeguard the European automotive sector.
The appeal comes amidst escalating tensions between the EU and US, fueled by concerns over potential trade wars. Trump, set to take office on Monday, has announced plans for steep tariffs on Chinese imports. There are fears he may also target countries maintaining robust trade with China.
ACEA Pushes for Open Trade with China and the US
The ACEA, representing automakers such as BMW Group, Renault Group, Ford of Europe, Jaguar Land Rover, Opel Group, and Volkswagen Group, called on the European Commission to prioritize open trade relations.
Ola Källenius, ACEA’s newly elected president, emphasized the value of preserving established supply chains and maintaining competitive markets. “Rather than building walls, we must reinforce the European internal market and ensure resilience,” Källenius wrote.
He also acknowledged the shared goal of job protection in domestic markets while advocating for the benefits of free trade. Källenius urged EU and Chinese policymakers to resolve the EU anti-subsidy case swiftly, fostering mutual agreement and avoiding unnecessary trade barriers.
Källenius cautioned against overly protectionist policies, warning that trade wars rarely produce winners and often cause widespread economic harm.
Challenges Facing the European Car Industry
European automakers face mounting challenges from Chinese competitors, whose vehicles often come at lower prices and include more features, supported by substantial government subsidies.
To address this, the EU imposed higher tariffs on Chinese electric vehicle (EV) imports, sparking fears of retaliatory measures. German automakers, including BMW, Audi, Volkswagen, and Mercedes-Benz, remain particularly concerned due to their significant operations in China.
Chinese government incentives, such as tax breaks and affordable land, have bolstered these companies’ presence in the region. However, with China as one of their largest markets, European manufacturers worry about potential import tariffs from Beijing.
Volkswagen’s recent decision to sell its Xinjiang operations, citing “economic reasons,” underscores the risks of growing trade tensions.
European automakers now look to policymakers to navigate these challenges and secure balanced trade agreements that protect the industry’s global standing.