b'24American Journal ofTransportation ajot.comEuropean autosector bears brunt of tariff turmoilHow Europes automakers adjust to tariffs could be a mixed bag of solutions.By Stuart Todd, AJOTPresidentTrumpmayLuman added.have ended the uncertainty asThe Brussels-based Asso-to the extent of US import tar- ciationofEuropeanVehicle iffs on vehicles from the EULogistics is certainly anxious by fixing them at 15%, com- to see an EU-US trade agree-pared to the pre-2024 duty ofment finalized.2.5%, but the half-year resultsAsanassociation,we of some of the major manu- do not take a position on the facturers show the impact ofindividual tariffs as this is a thedutiesintroducedearliermatter for the OEMs. How-this year at 27.5%. ever,itappearsthatmany Forexample,Mercedes- detailsaroundthesetrade Benz said it would incur costsdealsremainunresolved, for2025fromUSimportitsexecutivedirector,Frank dutiesofaround360mil- Schnelle, told AJOT.lion while Porsche estimatedWhat is important from it had taken a 400 millionour perspective is that clarity hit from the tariffs in H1. is established as soon as pos-d utyh iked iffiCult to sible to allow supply chains tobeadaptedlong-termto a bsorb meet demand. This is crucial INGs senior sector econ- to ensure stable and reliable omist, Transport & Logistics,supply. (PROGRESScontinuedticularly problematic is that itsficationi.e.theHarmonized Rico Luman, said that whilefrom page 22) not even certain that this com- System(HS)Number.This thereisperhapssomerelief3 M onthsw orth ofC ars competitive compared to otherpromise will hold. iswherethefinedistinction among EU players that the rated eliVered in24 h ours nations who face higher ratesAsurveyconductedbybetween products of slightly of 15% is half of that fearedTheimpactoftariffof duty. Also, EU goods havetheChamberamong3,500differentcomposition,coun-andcouldprovidesometurmoilswirlingaboutthethe advantage of being highly- companies showed that moretry of origin, or intended use is policy stability, absorbing itindustry in the first half of theinnovative which US manufac- thanhalf(58%)expectfur- made, and different tariff rates will be difficult given the rela- yearisnobetterillustratedturers have only limited scopetherdisruptionsintrans- may be applied. That level of tively low EBIT margins. thanbyluxurybrand Astontoreplace,shortofinvestingAtlantictrade.Thisfiguredetail has not emerged yet for Ifthey(automakers)Martin,whoscrambledtoheavily over time in productionrises to 74% for those with athevarioustradedeals,but hike prices accordingly, unitdeliverthreemonthsworthexpertise and capacity. subsidiary in the U.S. thats the required operational saleswilllikelysuffertooof cars from the UK to deal- vocabulary for importers and much (except for Ferrari per- ers in the US within 24 hoursn oC ertaintyC oMproMise d eVil in thed etail exporters.haps).Thismeanswecanat the end of June in time tow illh old It is the outcome of the sec- Hookham said it was his expectamixedapproachinbenefitfromlowerdutiesBut, by and large, businessond-phase, the negotiations, theunderstandingthattheU.S. practice. They are all lookingreduced from 27.5% to 10%. andindustryseelittleinthenitty-gritty of thrashing out theimport tariffs could not come intoprice,productofferingInvoicingthewholeofdeal to be enthusiastic about. details sector by sector in orderintoeffectuntiltheratefor andproductionadjustmentthesecondquartersontheThis agreement may haveto finalize a trade deal, whicheach HS code is agreed and opportunities. AndtherearesamedayallowedAstonbeen necessary politically, butthe European business commu- theUSHarmonizedTariff many variants. Martintoavoidhavingtoit remains a bitter pill to swal- nity eagerly awaits. Schedule (HTS) is updated to Anotheroptioncouldreportasalesslumpthatlowformanycompanies,As things stand, the dealinclude them.betospreadpriceincreasescouldhavesentalarmbellssaid Helena Melnikov, CEO ofis a work in progress, JamesIfyoulookattheEU acrosstheworldandoverringing among investors. Germanys Chamber of Com- Hookham, the director of thestatement (on the trade deal) time while there is talk aboutHowever,the10%dutymerceandIndustry.Itcre- GlobalShippersForumaand how vague that is about, productionflexibilityandonUK-madevehiclesisates additional burdens insteadgroupingofnationalship- say,fishproducts,itwould potential regional shifts. Andlimitedto100,000unitsofrelief:highertariffs,morepers associations, told AJOT. not be possible to apply tar-productioninexistingUS(BRUNTcontinued onbureaucracy, and reduced com- Whatshippersneedisiffsuntileachtypeoffish facilities will likely be raised,page 25) petitiveness.Andwhatspar- informationbytariffclassi- orfishproduct(definedby HS number) was assigned a tariff (and probably a quota).The US Customs and Border Protectionissuebulletins announcingwhenHarmo-nized Tariff has been updated with this level of detail.Nonewdevelopments onthenegotiationsfront were reported in the first two weeksofAugust,certainly not at the level of HS Code numbers that shippers need to work out the precise impacts of the tariffs on their particu-lar products, Hookham noted.TheCommissionisall but closed for business during August as its the customary holidayseasonandIwould alsoguessbandwidthinthe USDepartmentforCom-mercehasbeenmaxedout recentlybythePresidents announcements on 31 July on the Reciprocal Tariffs.i nVestMentp ledged oubtMeanwhile,onepartof (PROGRESScontinued on page 25)'