What does Trump’s 25 percent car tariffs mean?

President Donald Trump wrote on Wednesday night, Swedish time, on a presidential decrees there car duties are raised to 25 percent for all cars manufactured outside the US. This also applies to all car parts imported into US car factories from April 3, except from Mexico and Canada.

What does this mean?

The cars are becoming more expensive to buy for consumers, mainly in the United States. American companies also receive increased costs. This is because for decades the car companies have been used to sending cars and car parts in specialized factories around the world without customs.

The US GM, Ford and Stellantis (formerly Chrysler) are also losers because they shipped cars in a fierce stream between Canada, Mexico and the United States during the secure umbrella of the free trade agreement. Several new electric car models are manufactured, for example, in Mexico.

The only one who earns the US tariffs is peculiar enough President Trump’s couple horse Elon Musk. All Teslor sold in the United States come from US factories in California and Texas. For Tesla who has collapsed over 40 percent on the stock exchange since last fall, the tariffs like manna from heaven are.

For everyone else, Trump’s customs play is that boxer Muhammad Ali takes in from his toes and swinging a fist blow.

And Trump knows where it takes best:

Europe.

There, the crisis -hit car industry is already half knocked out. Mass settlements have caused large demonstrations in Germany. Trump’s customs increase thus becomes a tile in an increasingly heated geo -economic game in which the US president repeatedly points out the Allied EU as a threat to the United States.

Trump knows that the European car industry is the continent’s most important industry with close to 14 million employees, which accounts for around 7 percent of EU jobs.

Almost every fifth car in the world is sold in the United States. Europe exported last year cars to the United States for EUR 38.4 billion, where the German crisis -hit Volkswagen, BMW and Mercedes account for three quarters. Now more job slaughter and tougher pressure threaten pressure on Europe’s politicians.

Does this affect us in Sweden?

Yes absolutely. Car prices can be increased in general. In addition, Volvo Cars, Sweden’s second largest company with over 20,000 employees is hit hard. The US is Volvo’s second largest market where every fifth car is sold. And now comes the hard thing: Almost everyone is shipped from Gothenburg, especially the best sellers Mellansuven XC60 and large suction XC90.

But Volvo has a US factory in Charleston? Yes, but it bizarrely helps little at present. There, only the new ELSUVEN EX90 is made – which is generally seen as Volvo’s most important future model. But the introduction of it has evolved into a scandal in the silence: it is in practice around two years delayed after major software problems and is still manufactured in small volumes. If more car models are to be manufactured in the United States, Volvo must invest large sums in production equipment. This is unlikely because the US best seller XC60 and the XC90 are on their way out of the range.

Volvo therefore sits in a fox scissors.

But can’t Trump’s presidential order be just a negotiating play?

Yes, but we don’t know. What we do know is that an escalation in the trade war against Europe seems to be around the corner.

Trump introduced Steel and aluminum duties As late as March 12 this year. The EU then threatened with increased tariffs on, among other things, American whiskey and motorcycles, but has waited. EU Trade Commissioner Maros Sefcovic were actually and negotiated in Washington On Tuesday, just hours before Trumps wrote his presidential decrees on increased customs. Trump is now threatening further increased customs against Europe on Wednesday in a week – according to sources to New York Times it may be up to 20 percent on all goods from the EU.