Alexis Anninos on Trump's tariffs on imported cars and in which scenario Cyprus would be affected

Pressure is being placed on the already strained European Union automotive industry by US President Donald Trump's decision to impose additional 25% tariffs on cars and spare parts imported into the US from 2 April, thus widening the trade war that began after his return to the White House.

The tariffs come at a time when the EU auto industry faces fierce competition abroad, as European manufacturers export between 50 and 60% of the vehicles they manufacture to the US.

It is worth noting that in 2024 the US imported passenger cars worth $220 billion and automotive parts worth $474 billion, with the country's largest suppliers being Mexico, Japan, South Korea, Canada and Germany.

Indicative of the concerns created by Trump's new imposition of tariffs, this time on imported cars, was the dramatic statement made by the director general of the European Automobile Manufacturers' Association (ACEA), Sigrid de Vries, who warned of negative implications for automotive industries worldwide.

In this context, Sigrid de Vries stressed that the EU and the US must engage in dialogue to find a permanent solution to avoid tariffs and the disastrous, as she described them, consequences of a trade war.

Meanwhile, the European Association of Automotive Suppliers (CLEPA) on 27 March called on policymakers to prioritise finding solutions to trade barriers, after US President Donald Trump announced the imposition of 25% tariffs on imported vehicles.

"Tariffs of this magnitude will disrupt the flow of goods, increase production costs and ultimately make cars more expensive for consumers, even in the US," CLEPA said in its statement.

"It is a threat to the economic and industrial resilience of the Western world," the Association warned.

How and when will Cyprus be affected?

InBusinessNews asked the Managing Director at Cyprus Import Corporation Ltd (CiC), the exclusive distributor of Mercedes-Benz in our country, Alexis Anninos, to clarify the conditions that are now taking shape and whether the whole tug-of-war may also affect Cyprus. Anninos highlighted that the response that will be given by the European Union will be crucial.

More specifically, according to Anninos, the turn the entire situation within the global car market will take depends on the reaction of the European Union, as, as he explained, if the EU reacts with corresponding tariffs, then inevitably cars manufactured in the US and imported into the EU will be subject to tariffs.

"In such a case," he added, "we should expect to see the reaction of the Trump administration. Therefore, in this scenario, we will talk about an escalation of trade tensions between the US and the EU."

"The EU's reaction will directly affect Cyprus. If, for example, the EU decides to retaliate against 25% tariffs on imports of cars manufactured in the US, cars imported and subsequently sold in EU member states will be subject to 25% tariffs. The remaining cars are not affected,"Anninos indicated.

Alexis Anninos further pointed out that Cyprus and the companies themselves do not have much room for reaction, since the decision on whether or not to impose tariffs by the EU is a matter of policy.

"There is nothing we can do, either as Cyprus or as businesses, we await the EU's reaction," he pointed out.

The European Union's intentions

However, in her first reaction via 'X' on the evening of 26 March, European Commission President Ursula von der Leyen said that Brussels would continue to seek solutions through negotiations with Washington.

However, the Executive Vice-President for Prosperity and Industrial Strategy, Stéphane Séjourné, said that Europe knows how to react to such a tariff attack.

"We will have corresponding trade retaliation if there are such new announcements," she stressed, adding that the negotiation that preceded it was not a true negotiation.

Moreover, Commission spokesman Olof Gill announced that the European Union is preparing its response to the additional 25% tariffs announced by Donald Trump, stating that this response will be timely, robust, carefully weighed and that it will achieve the desired result.

However, he avoided giving an exact timeline for when the possible response from the EU would come.

(Source: InBusinessNews)