That 15 Percent Tariff Trade Deal With Europe Sucks For Fans Of Imported Cars

I’m sure most of us are utterly fatigued with the upending of trade norms and the frenzy around getting deals done before an arbitrary deadline, but the sun doesn’t set in the east for anyone, and this administration’s tariff-heavy approach is shaking the car industry as we speak. The European Union and the White House have settled on a deal that’ll see a 15 percent tariff on most items imported stateside including cars and parts, and while that’s better than a blanket 27.5 percent auto tariff, it means things are going to get more expensive for American fans of European cars.

Speaking of things that make people shake their heads, a report claims that a White House proposal is in the works to gut the EPA’s capacity to regulate greenhouse gas emissions, including those coming from tailpipes (though this seems unlikely), and Tesla appears to have discovered the human-driven taxi. On the plus side, students at a college in Kansas now get to look up in the atrium and see a legendary Ferrari, so that’s pretty cool.

Matt’s on vacation this week, and he’s left me the reins of The Morning Dump, our daily round-up of bite-sized pieces of car news that you’re gonna want to read. Normally, I’d suggest you brew yourself a cup of joe before tucking in, but given this particular news cycle, make that two coffees, or ten double espressos in a Venti cup, or screw it, just snort ground-up coffee beans at this point. (This is a joke; don’t do it).

The White House Has Reached A Tariff Deal With Europe

While cars from the European Union were initially expected to get whacked by a 27.5 percent tariff, a new trade deal has dropped that number to 15 percent, per the White House. It’s a number that still sucks, and it’s higher than the 10 percent figure reached with Britain, but one that seems less catastrophic than 27.5 percent. After all, these European brands — Ferrari, BMW, Porsche, Mercedes-Benz, basically any luxury car brand with a U.S. presence aside from Alfa Romeo — lean heavily on the U.S. market. Is this tariff deal good news? Well, sort-of? As Hildegard Müller, president of the German Association of the Automotive Industry wrote in a statement:

It is fundamentally good that EU Commission President Ursula von der Leyen and US President Donald Trump have announced a framework agreement and thus averted a further escalation of the trade dispute. Thanks also go to the Chancellor for his efforts.

What will now be crucial is how the agreement will be structured in concrete terms and how reliable it is.

But one thing is also clear: the US tariff of 15%, including for automotive products, will cost the German automotive industry billions annually and will burden them in the midst of the transformation.

Prior to the current disorganization of everything, cars brought into the United States from the European Union faced a modest tariff of 2.5 percent. Considering that roughly $45 billion worth of cars flowed from the EU into the United States last year as per the U.S. Census Bureau, that would’ve resulted in about $1.1 billion in tariff revenue collected. Sextuple that, and we’re going to see both a drop in demand and an increase in prices as manufacturers pass tariffs onto consumers. Yes, that means you’ll probably be paying at least some of the tariffs, should you buy a car made in Europe. It’ll likely be less impact than we’d have seen at a long-term 27.5 percent, but man, it still isn’t great. Plus, even that 15 percent rate comes with strings attached. Per Automotive News:

The EU agreed to purchase $750 billion in American energy products, invest $600 billion in the U.S. on top of existing expenditures, open up countries’ markets to trade with the U.S. at zero tariffs and purchase “vast amounts” of military equipment, Trump said.

Bernd Lange, the German Social Democrat who heads the European Parliament’s trade committee, said the tariffs were imbalanced and the hefty EU investment earmarked for the U.S. would probably come at the bloc’s own expense.

Trump retains the ability to increase the tariffs in the future if European countries do not live up to their investment commitments, a senior U.S. administration official told reporters July 27.

Knowing that the 15 percent tariff rate isn’t exactly set in stone doesn’t make this deal seem like phenomenal relief, even if some promise of stability is here. Also, car parts will be covered under the blanket rate, so your quality made-in-Europe oil filters, suspension components, and speed parts? Yeah, expect prices on them to stay elevated. Of course, there’s still a lot we don’t know about this blanket trade deal, but in the context of cars, American car buyers and European manufacturers both seem to be the losers compared to the state of things in 2019. Maybe it’s just me, but threatening to increase a cost of business by 1,000 percent then settling on a 500 percent increase doesn’t seem like strategic dealing with a key ally.

Maybe Don’t Panic About The Latest Emissions Rumors Yet

Speaking of government dealings, there’s a new report bubbling up out of the ooze of Washington. Relatively hot off the heels of the revocation of California’s ability to set its own emissions standards, the Wall Street Journal reports that the current administration is working on repealing a key declaration that gives the EPA the teeth to go after greenhouse gas emissions.

The proposed Environmental Protection Agency rule rescinds a 2009 declaration known as the “endangerment finding,” which scientifically established that greenhouse gases like carbon dioxide and methane endanger human lives.

That finding is the foundation of the federal government’s only tool to limit the climate pollution from vehicles, power plants and other industries that is dangerously heating the planet.

That doesn’t seem like a great thing, and it’s probably not set in stone considering how it seems to fly in the face of Massachusetts v. EPA, a judgement that found that states could sue the EPA if it didn’t regulate greenhouse gases. However, we do live in weird times, so who knows.

If this reported plan goes through, will it immediately affect tailpipe emissions? In many cases, probably not drastically. After all, most cars these days are engineered for global markets, and so long as other jurisdictions maintain vehicle pollution restrictions, the vast majority of new cars in America shouldn’t change much. Plus, there’s also the role of consumer demand. In the age of the four-figure car payment, drivers really don’t like rabbit-earing their pockets at the pumps, and hybrids continue to be hot stuff for shoppers looking to save on running costs.

Oh, and then there’s the simple fact that the car industry is one of long lead times. It takes years for a new car to go from early ideation to production, meaning much of the near-term future of the automotive landscape, say over the next three-and-a-half years, is pretty much set in stone. Outside of dedicated U.S.-market vehicles like heavy duty pickup trucks, no matter what happens, expect showrooms to remain more-or-less the same for now.

Full…Human Driving?

In the wake of announcing autonomous taxi service expansion in Austin, Texas, Tesla claims it’ll be launching Robotaxis in San Francisco, except they won’t be autonomous taxis in the same manner as Waymos because, well, the automaker reportedly isn’t allowed to do that because it doesn’t have the right permits. Here’s the reality, per Reuters:

With the Bay Area service, Tesla “is not allowed to test or transport the public” in an autonomous vehicle, even one with a human safety driver, according to the CPUC spokesperson, who added Tesla can only transport people using a human driver in a “non-autonomous vehicle.”

The spokesperson said Tesla told the CPUC on Thursday that it plans to offer rides to “friends and family of employees” and “select members of the public” under a permit the company has that allows a human driver to transport passengers in a “traditional vehicle” for “charter services.”

See, this whole thing started on a July 23 earnings call, when VP of AI Ashok Elluswamy announced plans to start up a Robotaxi service in the Bay Area “with the person in the driver’s seat, just to expedite, while we wait for regulatory approval.” However, Reuters reports that Tesla hasn’t applied yet for the proper DMV permits to test autonomous vehicles without safety drivers or transport paying passengers. The result isn’t a Robotaxi, it’s just a taxi. Sure, FSD will be used because it’s not actually self-driving and instead classified as a Level 2 system that requires constant human monitoring and potential human intervention, but pretty much every car on the road these days comes with Level 2 autonomy, and your last Uber ride probably used at least some of those features.

The Talk Of Campus

Why does it always seem like everyone’s alma mater gets some serious student life upgrades just after they graduate? From new cafeterias to serious investments in campus commons, upgrades to student life tended to miss many of us by a whisker. However, even if the school you graduated from now has a cooler campus, there’s always something to show that up. McPherson College in McPherson, Kan. might have the coolest campus commons showpiece of all, because it now has a Ferrari 365 GTB/4 hanging in its atrium.

Not exactly. See, McPherson College is the only institution in America offering a four-year Bachelor of Science program in automotive restoration, covering everything from paint to metalwork to small parts to trimming to mechanicals. It’s a seriously legit path of study, producing some high-grade results. A 1953 Mercedes-Benz 220 S restored by its students managed to podium in the Pebble Beach Concours d’Elegance back in 2023. Add in two scholarships established by Jay Leno, and suddenly the suspended Daytona makes a ton of sense.

What I’m Listening To While Writing TMD

It’s Monday, which means it’s time to get pumped up, and “Coast 2 Coast” by Michigan-native producer GRiZ featuring renowned grime MC Flowdan is just the ticket. From the trippy visuals of the video to the thumping drumline, this saw-heavy track has some serious groove to it that goes well with enough caffeine to jumpstart a megalodon.

The Big Question:

How have tariffs affected your personal automotive experience? Have you put off or fast-tracked a car purchase, been dinged on parts, or hurried up with non-critical repairs and/or modifications in anticipation of change?

(Top graphic image: Mercedes-Benz)