🚨 KITE Insta Analysis: A 25% US tariff on EU autos would hit Europe’s automotive core hard. In our KITE simulation, 🇩🇪 Germany’s auto-sector output falls by almost €15bn in the short run and about €30bn in the long run. Losses are also sizeable in 🇮🇹 Italy, 🇸🇰 Slovakia, and 🇸🇪 Sweden.
The broader macro hit is smaller than the sectoral one — but still meaningful. Real value added falls most in 🇸🇰 Slovakia (around -0.85% short run), followed by 🇩🇪 Germany, 🇭🇺 Hungary, and 🇸🇪 Sweden. This is what deeply integrated auto supply chains look like under tariff stress.
For 🇩🇪 Germany, the EU remains by far the biggest destination for automotive exports. But outside Europe, the 🇺🇸 US is the single most important market — ahead of 🇨🇳 China and 🇬🇧 the UK. That helps explain why US auto tariffs would bite German industry so directly.
For the EU as a whole, the biggest extra-EU destinations for automotive exports are the 🇺🇸 US and 🇬🇧 UK, followed by 🇨🇳 China, 🇹🇷 Türkiye, and 🇨🇭 Switzerland. So even a sector-specific US tariff would hit one of the EU’s most important external export markets.
As always, huge CAVEAT: We don’t have any details beyond “25% on EU automotives”. So these simulations give us direction and sense of magnitude, no “exact” forecast
Source: Julian Hinz on X/Twitter.
In other words, the header statistic is way overselling the impact which is meaningful in size but in all countries but Slovakia below 0.3% decrease in real value added. Even among exports, the US is the largest market outside of the EU, but even there the UK is basically just as large. The US is certainly less than 1/3 of those exports and tariffs are not going to evaporate that share either, just lead to decrease among that less than a third of exports outside of the EU (and most exports are staying within the Single Market anyway).
So, makes me wonder why that impact is exaggerated that much.