BMW, Benz to benefit from proposed EU-US export mechanism; no effect on Volkswagen

BRUSSELS is considering pursuing a potential arrangement that would allow European automakers that produce and export cars from the United States to import vehicles from the European Union (EU) at reduced tariff rates, according to two sources familiar with the matter.

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The discussion is part of the European Commission’s efforts to broker a trade deal with US President Donald J. Trump and would replace the hefty 25% tariff on car and car part imports the US administration implemented in April.

This would be a clear positive for those carmakers with major US production facilities, who would be able to use their US production to lower their exposure to tariffs.

This is what a trade deal means for the EU and how individual European automakers would be affected:

WHAT'S AT STAKE FOR EU?

According to data from European auto association ACEA, nearly 758,000 cars worth €38.9 billion ($45.55 billion) were exported to the US from Europe in 2024, more than four times as many as in the other direction.

One EU diplomat said cars were a “red line” for the bloc, making a concession on cars a caveat of any deal. However, Brussels and Washington have conflicting goals as Mr. Trump wants to revive US auto production while Brussels wants open markets for its sector, which is struggling with high energy costs and competition from China.

WHO STANDS TO WIN?