Summary of a television interview · Based on the recording of the conversation
In brief
Kliment Robev discusses Donald Trump’s 25% tariffs on all cars made outside the United States. In his view, the measures will hit non-American manufacturers selling into the US market as well as American consumers, while in Europe the losses are likely to be passed on through higher prices. Trump gains in the short term, he argues, but retaliation by trading partners makes the long-term benefits doubtful.
Key points
- According to Robev, Trump’s aim is for the tariffs to bring in around 100 billion dollars of extra revenue a year, while encouraging Americans to buy domestic cars and attracting foreign investment in US factories.
- Although most European and Asian brands already have plants in the US, he believes their capacity cannot meet American demand and that building new ones takes time and investment, so their sales will fall at least in the short term.
- He expects European carmakers to try to offset weaker American demand in their home markets, most likely by raising prices, which would hurt European consumers.
- In his view, the hardest hit will be Japan, South Korea, Canada and, within the EU, Germany and Slovakia – the country with the highest car production per head, around one million vehicles a year, and for which the industry is the backbone of the economy.
- He contrasts the reactions: Europe is seeking negotiations and has postponed its decision on countermeasures to the steel and aluminium tariffs until mid-April, Japan has said all options are on the table, while Canada reacted most sharply, with Mark Carney calling the move an attack on the Canadian economy and promising retaliation.
- Robev sees Trump’s second term as marked by the speed and intensity of his decisions, as he runs America like a corporation seeking to cut costs and the deficit; he expects unpopular measures early in the term and more stimulus later, and does not believe Elon Musk was behind the tariff decision, noting that Tesla shares have fallen by around 50% since Trump took office.
Context
The conversation followed the US administration’s decision to impose 25% tariffs on all imported cars, due to take effect on 2 April and also affecting models of American brands produced abroad.
Views reflect his position at the date of publication and are not investment advice. Regulatory information
