🚨 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.
Well, here is my source that it’s automakers.: “German Chancellor Friedrich Merz has led arguments against the ban, citing weak demand for electric vehicles in Europe and the dominance of Chinese automakers in the EV sector.”
I know about it.
But ask yourself: why there is a weak demand if an EV car is so much more convient ?
Merz probably just aknoledge that there are problems and currently people do not consider EV cars as a valid alternative.
Or maybe the vast majority of people live in a place/situation where charging an EV car is too of a burden, charging time excluded.