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| Tariffs on EU Manufactured car and auto parts |
U.S.-EU Trade Shift Targets Automotive and Strategic Imports
President Donald Trump announced a plan to reduce tariffs on EU-manufactured cars and auto parts from 25% to 15%, though no enforcement date has been set. This move follows the European Commission’s release of a zero-tariff list including U.S.-made fertilizers, plastics, and vehicles. EU Trade Commissioner Maros Sefcovic welcomed the executive order, calling it a key step toward tariff de-escalation. Meanwhile, tensions remain over digital policy, as Trump criticized EU antitrust fines against Google.
Expanded Zero-Tariff List Covers Critical Minerals and Nickel
In a surprise addition, Trump’s executive order also authorizes zero tariffs for select imports even without trade deals. These include commodities not sufficiently produced in the U.S., such as nickel products, critical minerals, and pharmaceuticals. Nickel and battery materials are essential to U.S. electrification and defense supply chains. The exclusions also cover consumer goods like coffee and bananas, with Brazil—a major coffee supplier—directly benefiting. The policy shift partially alleviates prior trade friction between the U.S. and Latin American partners.
Legal Challenges and Budgetary Impact Cloud Tariff Future
The Congressional Budget Office had forecast annual tariff burdens of $330 billion. However, the Trump administration estimates potential revenue as high as $1 trillion. That said, the administration now faces legal pressure. U.S. companies have challenged the legality of emergency tariffs, prompting a Supreme Court appeal scheduled for November. Treasury Secretary Scott Bessent acknowledged that a court loss could force the government to refund half the tariff revenue to importers, affecting federal balance sheets.
ScrapInsight Commentary
Trump’s tariff rollback reflects a strategic pivot favoring industrial inputs like nickel and critical minerals over blanket protectionism. The inclusion of nickel highlights its growing importance in EV and defense sectors. If upheld, this policy could ease pressure on downstream manufacturers and support global metal trade normalization. Legal outcomes, however, remain a pivotal variable.
