Delay of Auto Tariffs a Short-Term Relief for EU Carmakers

(Bloomberg) -- Go inside the global economy with Stephanie Flanders in her new podcast, Stephanomics. Subscribe via Pocket Cast or iTunes.

President Donald Trump’s decision to delay imposing tariffs on the European Union’s auto industry comes as a welcome relief to manufacturers, but the threat will hang over EU-U.S. trade relations and business sentiment in the region this year. According to Bloomberg Economics, 0.4% of all produced in the euro area ends up in cars and car parts exported to U.S., and 8.6% of the transport industry output. The overall economic shock from U.S. tariffs would be manageable, but at a time when Europe’s car industry is struggling to recover from challenges including tougher fuel emission standards and slower global demand, another blow is the last thing it needs.

©2019 Bloomberg L.P.