Donald Trump wants Europe to buy more American cars. But less than 1% of cars sold in the EU are U.S.-made. Here’s why pickups and SUVs rarely fit Europe’s roads, wallets, or loyalties.
The Practical Problems: Size and Fuel Costs
Europe’s medieval cities and narrow streets make large vehicles impractical. Italian villages, for instance, barely fit compact Fiats—let alone Ford F-150s.
Key barriers:
- Space: U.S. pickup trucks average 5.7 meters long; European parking spots max out at 5 meters.
- Fuel efficiency: Gas costs €1.90/liter in Germany vs. €0.70/liter in the U.S. Europeans prefer smaller engines (1.0–1.6L) over V8s.
- Taxes: Many EU nations tax cars by emissions or engine size. A Ford Mustang GT incurs €2,500+ yearly taxes in France.
“Try driving a big SUV around Sicily. It’s a nightmare,” says Hampus Engellau, a Swedish auto analyst.
Trade Imbalances and Trump’s Tariff Threat
In 2022, the EU exported €36 billion worth of cars to the U.S. (692,334 vehicles). The U.S. sent just €5.2 billion (116,207 cars) to Europe. Trump blames EU tariffs (10% vs. U.S. 2.5%) and wants retaliatory taxes.
Why tariffs aren’t the full story:
- U.S. brands like Ford and GM once owned European marques (Opel, Saab, Volvo) but sold them after losses.
- European automakers build U.S.-market cars (BMW X5, Mercedes GLE) in American factories to avoid tariffs.
- Shipping cars is costly. “You’re moving big boxes of air,” says Andy Palmer, ex-Aston Martin CEO.
Ford’s European CEO Jim Farley calls Trump’s trade focus “chaotic.” The brand now pivots to EVs and vans, cutting 3,700 EU jobs by 2027.
Home Team Advantage: Why Europeans Buy Local
Germans buy German cars. The French buy French. Italians buy Italian.
Market breakdown:
- Germany: BMW, Mercedes, Audi, and Volkswagen control 60% of sales.
- France: Peugeot, Citroën, and Renault claim 55% market share.
- Italy: Fiat leads with 28%.
Even Tesla faces pressure. Its Berlin-made Model Y competes with China’s cheaper EVs like BYD. “Europe is brutally competitive,” says JP Morgan’s Jose Asumendi.
American cars in Europe: Could Tariffs Backfire?
Trump’s proposed 25% EU car tariffs aim to boost U.S. manufacturing. Experts argue it’ll hurt innovation.
Risks:
- Higher consumer prices in the U.S. for BMWs, and Mercedes.
- EU retaliation against U.S. exports like bourbon or tech.
- Stifled collaboration: BMW and Toyota jointly develop hydrogen tech; Ford uses VW’s EV platform.
“Tariffs make companies lazy,” says Palmer. “They stop innovating.”
The Road Ahead
U.S. brands face three hurdles in Europe:
- Product mismatch: Build smaller, efficient EVs or city cars.
- Local loyalty: Overcome 80+ years of brand dominance.
- Chinese rivals: BYD, MG, and Nio undercut prices by 30%.
For now, Tesla remains the exception. But even Elon Musk warns: “Chinese automakers will demolish rivals without trade barriers.”
Final Thought
Americans love European luxury cars. Europeans don’t love American gas guzzlers. Until U.S. automakers adapt to local needs—or slash prices—this trade gap won’t close.
