US tariffs threaten automotive sector orders says AFIA

Portugal’s Association of Manufacturers for the Automotive Industry (AFIA) has admitted that US tariffs on the sector could put pressure on manufacturers’ order books.

And a representative of the association has criticised the US’s “unilateral decision” and admits that “if our foreign sales were at last year’s levels, that would already be positive” given the current context of negative overseas geopolitical shocks.

The US “unilateral decision” to backtrack on the trade agreement reached with the EU last year regarding international automotive trade will obviously affect the Portuguese automotive components industry, which is heavily dependent on other European markets such as Germany and Spain.

Exports to these European markets have held up so far, but a reduction in orders is expected in the coming months with the introduction of US tariffs next week, acknowledges the Association of Manufacturers for the Automotive Industry (AFIA).

Washington has once again imposed tariffs on the European automotive sector after the trade agreement reached last year, which stipulated 15% barriers. Therefore, European vehicles will now pay a 25% tariff upon arrival in the US market, a “unilateral” decision by the US administration that constitutes “a significant setback” for European manufacturers, admits its president, José Couto.

Source: Jornal Economic: Credits. AIFA and Invest in Portugal