On Friday, budding hopes for an agreement in the tariff conflict between the EU and the USA drove up European auto stocks, particularly the Stoxx Index. This is in response to a new offer from the USA to the EU aimed at resolving the trade dispute, which was submitted to the EU Commission on June 26/27, 2025, and is currently under review.
New Offer and Reactions
The negotiations for a comprehensive free trade agreement between the EU and the USA have been stalled for years. However, there is now movement: the US side has presented a new proposal, the details of which are not yet public. EU Commission President Ursula von der Leyen stated that they are ready for an agreement but are also prepared for the possibility that no satisfactory solution will be reached. All options remain open.
Appeal from German Politics
Federal Chancellor Friedrich Merz is pushing for a quick and pragmatic resolution of the conflict. He emphasized the urgency for German companies—particularly for the automotive industry—as the tariffs imposed by the USA would heavily burden them. Merz advocated for a simple and swift resolution rather than a lengthy and complicated process.
Impact on the Automotive Industry
The tariffs primarily affect car imports into the USA: since April/May 2025, increased tariffs of up to 25% on vehicles and auto parts from Europe have been in effect; previously, these were only about 2.5%. These measures significantly burden German car manufacturers, as the USA is an important sales market. There are transitional arrangements with partial reimbursement of tariffs for vehicles assembled in the USA, as well as exemptions from aluminum and steel tariffs for auto parts.
Market Relevance
This topic is relevant for investors and private investors: a possible agreement in the trade dispute would reduce uncertainties and could provide positive impulses for European automotive stocks—this was already reflected in the increase of the Stoxx Auto Index on Friday.
Summary:
– New US offer to resolve the tariff conflict with the EU is available (end of June 2025).
– Negotiations on the free trade agreement have been stalled for years; now hopes for progress.
– Chancellor Merz demands a quick simple solution in favor of the German industry (automobile, among others).
– US tariffs on cars/auto parts from Europe have been significantly increased since April/May 2025 (up to 25%).
– Positive market reaction of European automotive stocks due to hopes for a de-escalation in the trade dispute visible on Friday.