The EU caught between US duties and Beijing's activism

The US is by far the largest importer of machinery in the world. Since 2010, its share of world trade has fluctuated between 20 and 24%. The leading exporter is Germany, with its share rising from 23% in 2010 to 18% in 2023, followed by Japan, from 17% to 12%. China, which weighed in at 1% until '19, reached 8% of world exports in '23. US/EU trade partly reflects the same picture. In 2024, the US imported some 758,000 vehicles worth close to EUR 39 billion from Europe, against exports to Europe of almost 165,000 vehicles worth EUR 7.7 billion. Meanwhile, we note that the import-export of cars concerns the medium-high end of the market, with values around 50 thousand euro per car, while the average in the Italian market, to give a comparison, is around 30,000 euro.

The imbalance between the two big markets is five to one in favour of Europe and is largely determined by Germany alone, from which the Americans in 2024 imported USD 25.6 billion worth of cars against exports of USD 5.5 billion.

These exchanges took place under a tariff regime favourable to European products, burdened with a 2.5% duty compared to the 10 applied to cars imported from America. Completing the picture is the euro/dollar exchange rate. In the first Trump presidency and until 2021 the US currency was rather weak against the euro, fluctuating between 1.13 and 1.18. Since 2022 there has been a gradual strengthening of the dollar to 1.07 against the euro, making it easier for Americans to buy our products. On the one hand, we are well aware that the trade in cars between the United States and Europe is marginal compared to the general denunciation that the White House has been hurling at the balance of world trade since at least 1995, the establishment of the WTO. On the other hand, we cannot ignore other points of friction between the United States and Germany, such as the 2015 memorandum with Russia that laid the foundations of Nord Stream 2, never digested by the Americans until its explosion in '22, or the diesel-gate that turned a minor imbroglio into the condemnation without appeal of the best car powertrain, on which the Germans were and are world leaders. Having said that, the European car industry has already inflicted the greatest damage on itself by investing billions in the illusion of being able to convince customers instead of resisting the useless Green Deal regulations, which politicians do not want to revise despite war scenarios and the disruption of world trade. The pain threshold is already so high that the tariffs may not even be felt.