European carmakers could see their revenues seriously impacted if President Donald Trump presses ahead with new tariffs, analysts told CNBC.
“New tariffs on EU cars would have a significant impact … The United States is the biggest and highest margin market for them. It could mean a significant 7 to 10 percent hit on 2019 earnings estimates to the main automakers in Europe,” Daniel Lacalle, chief economist at Tressis Gestion, said via email on Wednesday.
The EU is the largest exporter of motor vehicles in the world, whereas the United States is the largest importer of motor vehicles in the world. According to the European statistics office, Eurostat, the U.S. imported cars amounting to 254 billion euros ($296.12 billion) in 2016, while Europe imported only 77 billion euros.
To reduce the U.S.’s trade deficit, Trump has threatened multiple times that there could be new duties applied to European cars. “We are finishing our study of tariffs on cars from the EU in that they have long taken advantage of the U.S.,” Trump said Tuesday, “In the end it will all even out and it won’t take long.”