U.S. President Donald Trump recently threatened the EU with tariffs: “The European Union is very, very bad to us. So they’re going to be in for tariffs. It’s the only way … you’re going to get fairness.” Cars made in America and shipped to the EU are subjected to 10% duties, but European-made vehicles imported to the US get a far lower 2.5% customs rate. That doesn’t seem fair, does it?
Speaking at the WELT-Wirtschaftsgipfe conference earlier today in Berlin, BMW CEO Oliver Zipse proposed that the EU and US level the playing field by applying a singular tariff rate of 2.5% on both sides of the pond. This would ultimately benefit customers by avoiding having to pay substantial artificial markups. We can all agree that new cars are already shockingly expensive, and tariffs only worsen the situation.
“Our balanced global setup makes us resilient and competitive. Nevertheless, free trade is of immense importance worldwide: It is one of the most crucial drivers of growth and progress. Tariffs, on the other hand, hinder free trade, slow down innovation, and set a negative spiral in motion. That is why we should be discussing fewer rather than more trade barriers. The EU could take a major first step here: while import tariffs for vehicles from the US into Europe are ten percent, they are only 2.5 percent in the other direction. Let’s create a level playing field: a tariff rate of 2.5 percent on both sides. Consumers would also benefit from this: Because high tariffs make products more expensive and less innovative.”
Earlier this month, BMW joined Chinese automakers in opposing EU tariffs on electric cars assembled in China. The luxury brand filed a challenge at the Court of Justice of the European Union (CJEU). When the EU-imposed tariffs were introduced last October, the iX3, MINI Cooper (J01), and Aceman were severely impacted. The BMW Group was hit with a massive 20.7% tariff. It’s much worse for SAIC, which has been slapped with a 35.3% tariff. Cars made in China and imported to the EU are also subject to a 10% import duty.
Oliver Zipse has been quite vocal about tariffs, vividly describing them as “shooting yourself in the foot.” He was also quoted as saying tariffs are “shadowy protective functions that essentially harm ourselves.” BMW’s boss was referring to Chinese EV tariffs as a “fatal signal for the European automotive industry.”
