Tariffs, Trade, and Transformation: The Impact of U.S. Protectionism on the European Automotive Industry

This thesis explores the hypothetical effects of the 2025 U.S. tariffs on the European automotive industry, situating them within the broader debate on protectionism, free trade and fragility of global supply chains. This study begins in the first chapter, by retracing the theoretical foundations of international trade, starting from the classical approaches of Mercantilism, Smith and Ricardo’s theories, to the more modern theories of Porter, Vernon and Krugman. These premises allow a better understanding of the political and strategic dimensions of tariffs. The first chapter sheds light on the constant tension between free trade and protectionism, which facilitates a better comprehension of tariffs as both economic instruments and political tools. The centre of attention of the second chapter is the European automotive sector, and how it can be considered a pillar of the European Union’s economy both in terms of employment and innovation. This chapter delimits the structural characteristics of the industry, including its deep interconnection into global value chains, its export-oriented nature, and also its reliance on both foreign and intra-European suppliers for critical technologies and components. This sector highlights the paradox of a sector that remains globally competitive yet increasingly exposed to external vulnerabilities, making it weak to any sudden shift. The focal point of the third chapter are the 2025 tariffs adopted by President Trump, the analysis of the rationale behind their introduction, their expected impact on European exporters and also their broader political significance. By framing these tariffs as a consequence of a much wider resurgence of economic protectionism and nationalism, the chapter shows how the adoption of protectionist measures is reshaping not only bilateral relations between the European Union and the United States, but also it shifts the whole governance of international trade more generally. The last chapter adopts a descriptive-analytical approach, making use of UN Comtrade data aggregated into the EU-ALL dataset. Through a combination of charts and quantitative evidence, the aim of this section is to map the geographical distribution of the EU automotive trade flows, to identify the weight of the most prominent markets, to redefine the role of the United States and also to expose the EU’s heavy reliance on Asian exports for advanced components. The chapter also wants to focus on the increasingly pivotal role of Eastern and Central European countries as production hubs, and on the limited but potentially growing importance of markets such as Latin America and Africa. The thesis argues that the 2025 tariffs should not be viewed as a simple bilateral trade dispute, but rather as a critical moment for the resilience of the European automotive industry. These measures exacerbate existing vulnerabilities, such as the concentration of supply chains, reliance on external partners, and the pressing imperative of decarbonisation. At the same time, they create the perfect opportunity for strategic adjustment: potential responses may include diversifying trade partnerships, expanding localised production, investing in sustainable technologies and also deepening intra-European integration so that the sector may thrive also in critical times. Tariffs may close doors, but they also compel the European automotive sector to open new ones towards diversification, green innovation and strategic independence.