Trump Promises to Cut Tariffs on EU-Made Cars Amid Trade Realignment

US-EU Trade Shift: Trump Commits to 15% Tariffs on EU-Made Cars

President Donald Trump has pledged to reduce tariffs on EU-manufactured cars and auto parts from 25% to 15%. While the executive order, signed on September 5, outlines the reduction as “necessary and appropriate,” no implementation date has been specified. EU Trade Commissioner Maros Sefcovic hailed the move as a breakthrough in US-EU trade relations.

The reduction follows the European Commission’s August 28 announcement proposing zero tariffs on a range of US exports. These include fertilizers, plastics, machinery, cars, and car parts. This reciprocal trade arrangement was a condition for the US lowering its car tariffs. However, tensions remain high due to ongoing disputes, such as recent EU fines on Google, which Trump criticized via his social platform.

Expanded Tariff Exemptions Target Critical Materials and Consumer Staples

Alongside the car tariff reduction, the Trump administration released a new executive order expanding tariff exemptions. The move allows for unilateral reductions on imports not produced—or insufficiently produced—within the US. The exemptions, effective from 12:01 a.m. Monday, cover nickel products, critical minerals, and pharmaceuticals under active Section 232 investigations.

Consumer goods such as coffee, cocoa, and bananas have also been removed from the tariff list. This partially eases trade tensions with Brazil, which supplies over 30% of US coffee imports. Trump’s order reflects an effort to minimize inflationary impact while supporting domestic supply chains.

Notably, the administration had earlier exempted energy commodities and consumer electronics like smartphones from tariffs. These shifts show a balancing act between protectionism and economic pragmatism.

SuperMetalPrice Commentary:

Trump’s pledge to cut tariffs on EU-made cars—and expand exemptions on key commodities—signals a strategic pivot ahead of election season. While the auto sector stands to benefit, the broader impact is felt across critical minerals and battery materials. Exempting nickel and other inputs may stabilize US supply chains for EVs and green technologies. However, legal uncertainties persist. The pending Supreme Court case could force partial refunds of tariff revenues, complicating fiscal planning. Traders and manufacturers should monitor implementation timelines closely, as the current lack of clarity limits immediate pricing strategies.