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Brussels, Belgium – The re-election of Donald Trump as the 47th President of the United States has introduced uncertainty for transport stakeholders in the European Union (EU), with expected changes in US policy on tariffs, investment, and climate action.
Tariffs and Trade
With Trump’s proposed 10% tariff on all US imports and higher rates for Chinese products, biofuel feedstock prices could rise, and retaliatory tariffs could reduce export opportunities for American Sustainable Aviation Fuel (SAF) producers who, according to ICAO data, account for 65% of global SAF production.
The European aircraft sector, including global giant Airbus, may also face challenges, as Trump’s victory could usher in a wave of aerospace protectionism aimed at propping up Boeing during an intense period of restructuring.
European carmakers are also bracing for impact. Trump has previously expressed his desire for German car companies to become American, suggesting substantial tariffs for those not moving production to the US. According to ACEA data shared with Green Mobility Magazine, over €50 billion worth of vehicles are traded annually across the Atlantic, which could disrupt a highly interdependent market.
Investments
The future of the Inflation Reduction Act (IRA), enacted by Biden in 2022, is now uncertain. Trump has criticised the “Green New Scam” and promised to terminate the IRA, which provides significant support for SAF, hydrogen, electric vehicles, and more. However, he may face opposition from Republican-held states and industrial lobbies benefiting from IRA funding. The potential non-renewal of key tax credits beyond their 2027 expiry is also a concern.
Climate Action
The US could (again) withdraw from the Paris Agreement, frustrating global climate cooperation.
The USA could also review its participation in the International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation, also known as CORSIA, weakening the already criticised global scheme aimed at reducing international aviation emissions. In 2026, the European Commission will assess whether CORISA is sufficient for flights to/from Europe and may extend the EU ETS to international aviation, leading to potential friction in the US-EU relationship.
Domestically, Trump’s energy policy, outlined in the Project 2025 document, focuses on ending the “war on fossil fuels,” restoring energy independence, opposing wind power, and promoting consumer choice in vehicle purchases. This stance could slow the transition to electric vehicles and negatively impact automakers’ electric vehicle strategies both in the US and around the world.
EU Stakeholder Response
EU transport stakeholders are assessing the implications of Trump’s victory and preparing for potential disruptions and new opportunities.
Julia Poliscanova, Senior Director of vehicles & E-mobility Supply Chains at Transport & Environment, commented:
“Clearly Trump is terrible news for global climate action. He has made clear that he would pull the US out of the Paris Agreement again and has regularly made climate-sceptic statements. There are also risks around the implementation of the US Inflation Reduction Act, the landmark climate legislation introduced by the Biden administration to decarbonise the transport and energy sectors in the US. However, despite the outcome, Europe has already shown it can lead and advance the clean energy transition at home and abroad, regardless of who’s in power in the US. We must continue this leadership, doubling down and implementing the EU Green Deal.”
Matthias Schmidt, European Automotive Market Intelligence Analyst, told the Green Mobility Magazine that European automakers are currently looking at options to mitigate tariffs:
“In a few words I would say, for the likes of BMW and Mercedes that have large production sites in the US, it won’t be too much of an issue. Zipse (BMW) said yesterday that they have a 65% local production mix content in the US (85% in China) while the likes of VW also have a US facility with room for expansion, while they are also currently constructing a facility for their US Scout Motors operation. Volvo Cars are also ramping up at their US facility currently with the EX90/XC90 and Polestar 3. It will likely hit all four of those mentioned though when it comes to lower priced small sector models which are imported”
Schmidt did, however, note that major automakers were not out of the woods, explaining that “all three German OEMs are at risk of being impacted by tariffs aimed at their NAFTA Mexico facilities which could end up running at under utilisation if Trump hits Mexican imports which will keep them awake at night”.
Mark Watts, Director at LP Brussels and Green Mobility Magazine Editorial Board Member, emphasised the need for EU action:
“The return of Trump is a wake-up call for Europe, especially in our transport sector. To avoid our own “Trump moment,” we need honest dialogue and bold action. Europe’s transport sector isn’t decarbonizing fast enough, fuelling social and economic unease as manufacturing and jobs shift away from our expensive, heavily regulated and taxed EU. Yet, we’re still stuck in self-congratulatory events in Brussels, ignoring the reality. The solution? Build a just society as the foundation for a just transition.”
The European Commission’s President, Ursula von der Leyen, warmly congratulated Donald Trump on his presidential victory and emphasised the bond and partnership between Europe and the United States, inviting the President-elect to work together a “transatlantic partnership that continues to deliver”.
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