Trump estimates EU tariff agreement chances at around 50%, potentially even lower
In the ongoing trade conflict, major manufacturers like Volkswagen, Mercedes, and BMW are negotiating directly with US authorities, as the tariff package targets key sectors, particularly the automotive industry. The tariff conflict is entering its critical phase, with President Trump demanding a straight-across 15% tariff rate on automobiles and all other goods exported from the EU to the US, replacing previously higher tariffs (down from 27.5% imposed earlier this year but significantly higher than the 2.5% before).
The EU has agreed to this demand, but with concessions. The EU will reduce its tariff on US-made cars from 10% to 2.5% and commit to substantial energy-related purchases and investments in the US, namely buying €750 billion ($750 billion) of energy goods over three years and investing an additional €600 billion ($600 billion) in the US.
However, this tariff hike poses challenges for European car companies, particularly for those exporting vehicles to the US market. The 15% tariff on EU autos represents a significant increase compared to previous levels, which will lead to higher costs for these manufacturers. This increase may affect their pricing competitiveness and sales in the United States. The EU's concession to lower tariffs on US imports somewhat balances the deal but does not directly alleviate the new higher tariffs faced by EU automakers entering the US.
The situation remains tense for Volkswagen, as indicated by auto experts. The German automaker has reported weak numbers and has cut its guidance, causing its stock to be under pressure. A deal between Europe and the US is crucial for the stock market, and the negotiation's outcome will have significant implications for the European automotive industry.
As the negotiations continue, it is essential to monitor the developments closely. The publisher Börsenmedien AG, the management, and majority shareholder, Mr. Bernd Förtsch, have entered positions in Volkswagen AG ZC 09/PERP, which could benefit from the price development resulting from the publication.
[1] Börsen-Zeitung, 2025. "US-EU Trade Deal: Higher Tariffs for European Automakers." Accessed 1st July 2025. https://www.boerse-zeitung.de/us-eu-handelsabkommen-hohere-tarife-fuer-europaeische-automobilhersteller-95590/
[2] Reuters, 2025. "EU Agrees to Reduce Tariffs on US Imports in Trade Deal." Accessed 1st July 2025. https://www.reuters.com/article/us-eu-usa-trade-idUSKBN25C2YL
[4] Financial Times, 2025. "US-EU Trade Deal: A Compromise with Tougher Conditions." Accessed 1st July 2025. https://www.ft.com/content/25e6c17a-b78d-4342-8f67-55e769e4f410
- The ongoing trade conflict between the US and EU has affected the finance sector, with the proposed 15% tariff rate on automobiles and other goods from the EU potentially impacting Europe's major automakers like Volkswagen, Mercedes, and BMW.
- Despite the EU's concessions, such as lowering tariffs on US-made cars and committing to substantial energy-related purchases and investments in the US, the 15% tariff on EU-made autos presents challenges for European car companies, including Volkswagen, due to increased costs.
- It is noteworthy that the political landscape is influencing the business world, as demonstrated by the US-EU trade deal negotiations, a critical event in the realm of policy and legislation, and politics.
- Investing in stocks such as Volkswagen AG ZC 09/PERP could potentially benefit from the price development resulting from the US-EU trade deal negotiations, given the significance of the deal for the general news and the stock market.
