When a three tonne Ram pick-up collides with a VW Polo, the American truck always comes out on top. Europe’s auto lobby is working hard to ensure the same is true whenever Donald Trump meets the EU.
Remember that excruciating photo of presidents von der Leyen and Trump giving a thumbs up to their trade deal last year? The deal saw the Europeans accept 15% tariffs on most of their exports while the tariffs on most US industrial goods fell to zero.
How did the EU agree to such a terrible deal? Probably the hope was that yielding on tariffs could help the EU buy good relations with President Trump. That has not turned out so well.
Almost exactly a year later, Trump has renewed threats to impose higher tariffs on EU cars. Once again, the Europeans find themselves bent over a barrel to protect their automotive sector.
Indeed, the auto industry was the main reason for the original EU-US trade deal. I was privy to some of their lobbying during the so-called strategic dialogues between President von der Leyen, Trade Commissioner Maroš Šefčovič and the auto execs. The industry’s message was loud and clear: “make a deal, whatever the price.”
When the deed was done in Turnberry – and many said it resembled capitulation more than compromise – the car industry thanked the Commission president for negotiating a deal that would increase tariffs on EU exports, and lower them on US exports to the EU.
Why?
Let’s look at the car industry’s leader, BMW. Of all European OEMs, their share of overseas ‘imports’ is the highest. The Bavarian automaker is the US’s largest car exporter by value (17%). Its popular X Series SUVs are built in Spartanburg, South Carolina, BMW’s biggest factory worldwide. In the run-up to Turberry, BMW CEO Oliver Zipse suggested the EU should lower its tariffs on US vehicle imports.
That’s exactly what happened and though not all carmakers were happy with the outcome the auto lobby is pushing for the EU to agree to the deal.
So, what does all of this have to do with Ram trucks and VW Polo?
One of the top US auto demands is for the EU to accept US safety and green standards as equivalent to EU rules. Currently many American SUVs and pick-up trucks do not meet EU safety standards and can’t be sold. The car industry supported the idea.
The irony is the EU has been turning a blind eye to US pick-up truck sales for years. In 2024, nearly 5,200 Rams were sold in the EU. Those Rams were approved using a loophole called the Individual Vehicle Approval procedure, which is meant for one off, highly customised vehicles, and allows national authorities to waive EU safety standards. To add insult to injury, these ultra high emission RAMs (average 347g/CO2km) are not counted towards EU CO2 standards.
The EU Commission had recently made moves to close off the loophole. A draft law it prepared would require IVA-approved vehicles to comply with EU rules on CO2, on-road air pollutant testing, and pedestrian protection standards.
Now the car industry is calling ‘daddy’ for help.
In a letter to Trump’s Commerce Secretary, EU-headquartered Stellantis – the producer of the Ram – teamed up with GM and Ford to urge the US to stop the EU’s move to tighten the rules. Now, the US ambassador to the EU says applying European safety checks would breach the spirit of the US trade deal.
What will Brussels do? Rumour has it the proposed reforms to stop Ram trucks from being approved as equivalent to Polos under IVA are now on von der Leyen’s desk. Will the Commission again sacrifice Europe’s interest to protect (parts of) the car industry?
There’s a growing consensus the EU needs a different relationship with the US. That will require EU lawmakers to also reassess their relationship with the auto lobby.
The reality is the ID.Polo – a small, affordable electric car launched earlier this month – not the Ram pickup, is the future of the European car industry.
