Suppliers in Europe's automotive sector fear lower steel demand as a result of the 25 percent import duties imposed by the United States on March 26.
A 90-day pause in the work of the US government. On April 9, the "mutual" trade tariff of 20% on all EU goods instead of the general rate of 10% brought some relief to manufacturers. However, the actions of US President Donald Trump, which prompted the European Commission to cancel planned retaliatory tariffs, left in force 25% duties on steel and automotive products.
Muted electric vehicle (EV) demands and financial problems in the EU automotive industry led to protracted negotiations over annual steel contracts, with buyers seeking discounts of around EUR100 per tonne from metallurgists. Many negotiations, which usually end in the fourth quarter, dragged on into the first quarter of this year. Currently, suppliers for Europe's automotive sector, which consumes about 17% of EU steel, fear a further decline in demand and downward pressure on prices.
In an April survey, European Parliament respondents said that demand for cars in Germany remained stable year-on-year during the first three months of 2025. Eurofer predicts that car production in the EU will increase by 2.1% this year, recovering slightly from a 6.2% decline to 14.8 million units by 2024.
Reduction of exports to the USA
Lower demand in the United States is expected to create additional challenges for the sector. We are already making the transition to electric vehicles and increasing competition from China. Modeling conducted by the economic consulting firm Oxford Economics shows that car exports from Germany and Italy could decline by 7.1% and 6.6%, respectively, as a result of the tariffs imposed by President Trump. Spain and France's exports are projected to decrease by 2.4% and 2.3%, respectively, due to their lower market influence.
In 2024, 22% of Spain and France's exports will decrease by 2.3%. EU automotive exports – almost 760,000 new vehicles worth 38.9 billion euros – were shipped to the United States. Two thirds of this volume accounts for
