Donald Trump scares French and European car manufacturers with his customs duties

AUTOMOTIVE – Gray clouds have been gathering over the global automobile market since the election of Donald Trump. The Republican's mandate does not bode well for the sector, as evidenced this Tuesday, November 26, by the situation of the Stellantis automobile group, which tanked on the Paris Stock Exchange. The cause: Donald Trump's statements threatening to increase customs duties on products coming from China but also from Canada and Mexico.

“On January 20, as one of my many first executive orders, I will sign all necessary documents to impose 25% tariffs on ALL products entering the United States on Mexico and Canada.”wrote President-elect Trump in a post on his Truth Social network. Decisions that he justifies by the crises linked to opiates and immigration.

In a separate post, Trump announced an increase in customs taxes of 10%, which is in addition to those already existing and to those additional that he could still decide, on “all the many products arriving from China to the United States”.

Manufacturers in the red on European markets

In light of these announcements, Stellantis could therefore review its plan to transfer production of its Ram pickups to lower-cost countries, according to the Bloomberg agency. Especially since “the fear is that Europe will also be in the mix, even if (Donald Trump) has not yet mentioned it”underlines Alexandre Baradez, head of market analysis at IG France interviewed by AFP.

As a result, on European markets, European manufacturers and their subcontractors were seeing red this Tuesday morning. On the Paris stock exchange, Renault lost 0.53% and the equipment manufacturer Valeo lost 2.57% at mid-morning. Same thing in Frankfurt where Volkswagen dropped 2.45%, BMW 2.25%, Porsche AG 2.56%, Mercedes-Benz 2.06% and Daimler Truck 4.71% around 10:15 a.m. Atmosphere.

What if Musk became the Europeans' best ally?

But this is not the only decision that can shake European manufacturers. Donald Trump also wants to end the $7,500 bonus for the purchase of an electric car in the United States. Which would go hand in hand with its desire to cancel the imposition on manufacturers to produce 67% of electric vehicles by 2034 and relax the various emissions standards. He even said he wanted to prohibit certain states, such as California, from imposing their own stricter regulations on the matter.

But if he takes action, these three decisions by President Trump would certainly have an impact on the development of electric compared to thermal in the United States, but not only that. This would have repercussions on a global scale, and therefore also in France. Because our neighbor across the Atlantic is the second largest global market in the sector.

Faced with this enormous American slowdown, manufacturers in the country and Europe might want to stay thermal for a little longer. Thus, the price of vehicles will not fall and could even increase in Uncle Sam, as in Europe. Finally, this could also threaten European jobs, as well as in France.

Unless, as pointed out Automobile MagazineTesla boss and member of the new Trump government, Elon Musk, has his say on the matter…

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