EU-U.S. trade deal gives €4 billion boost to European carmakers

European automakers including BMW and Mercedes-Benz are set to gain €4 billion from a new EU-U.S. trade agreement that lowers tariffs on vehicle exports. The move offers relief in a key market but still leaves duties higher than pre-2024 levels.

BMW, Mercedes-Benz and other European carmakers are expected to benefit by up to €4 billion ($4.7 billion) following a trade deal between the European Union and the United States, according to Bloomberg Intelligence.

The agreement reduces tariffs on car imports from the EU to 15%, down from 27.5%.

The deal brings clarity to a vital export market for major automakers such as Mercedes, BMW, Porsche and Volvo. The companies had previously warned that steep tariffs imposed by the Trump administration in April would increase supply-chain costs and disrupt financial forecasts.

BMW and Mercedes, which export around 185,000 vehicles annually from their U.S. plants, will also benefit from tariff exemptions, according to Bloomberg Intelligence analyst Michael Dean.

Auto stocks across Europe rose on Monday following the announcement.

“It’s the best result out of what was looking like a bad situation,” said auto analyst Matthias Schmidt, noting that German and Swedish executives will be relieved.

However, industry groups voiced concern that the new 15% tariff remains significantly higher than the 2.5% rate that existed before the recent trade tensions. Germany’s VCI chemical-industry association, which includes suppliers to carmakers such as BASF, warned that elevated tariffs could erode the competitiveness of European exports.

“If you’re bracing for a hurricane, you’re grateful for a storm,” said VCI President Wolfgang Große Entrup. “Nevertheless, the agreed tariffs are too high.”

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