The extent of Trump's threat regarding tariffs is quite substantial.
Trump's presidential tenure has only been a few weeks, and already, he's kicked off a series of trade wars. The objective? Political gains, which include snatching investments, jobs, and money from other nations. The automotive industry is a prime target, given its symbolic value and easy association with images of cars and assembly-line work.
So, how many jobs hang in the balance? Let's do some math. In 2024, the USA sold 5.6 million more vehicles than it produced. That's a massive net import. If Trump fantasizes about bringing all these car productions back to the USA, we're talking about 170,000 direct automotive jobs, considering an employee costs around 80,000 euros yearly.
But we've got to account for jobs in related industries. Every automotive manufacturer job creates two jobs in the supplier sector. So, the number of jobs at stake skyrockets to 510,000, and comparisons with other countries place the figure closer to 600,000 US jobs.
Now, you might wonder about the extra investments involved in constructing factories for producing 5.6 million cars, not to mention the ancillary jobs and turnover needed. That's a whole other ball game.
The keen observer can see how Trump's trade war policy poses a lethal threat to the auto industry, especially in the ongoing dispute with Europe. The EU currently demands an impressive 10% tariff on car imports from the USA, while the US only returns the favor with a 2.5% tariff. But here's a little-known fact: the 'Chicken Tax' of 25% remains intact for the import of 'Light Vehicles' (SUVs) into the USA. Even without Trump's belligerent threats, Europe is eager to lower tariffs as a countermeasure.
But this trade conflict isn't just about the numbers. Trump sees tariffs as weapons, leveraging them to bully both allies and adversaries. European nations can retaliate by imposing their own tariffs, but developing nations like Mexico are left defenceless against the loss of their industries. Trump's trade policy has painful echoes of colonialism, a period in history where powerful nations ruthlessly exploited their colonies for financial gain.
Trade relations between the USA and Europe have been strained due to Trump's trade war, particularly in the automotive industry. The EU currently imposes a 10% tariff on car imports from the USA, while the US only returns a 2.5% tariff. Yet, the 'Chicken Tax' of 25% remains for the import of 'Light Vehicles' (SUVs) into the USA, creating an imbalance in trade relations.
