US tariff threat adds pressure on Portugal’s auto sector
A planned rise in US tariffs on EU cars to 25% is adding to cost pressures for Portugal’s auto industry, which is already facing higher energy, logistics and raw-material costs.
Portugal’s automotive industry is facing fresh pressure after US President Donald Trump said he would raise tariffs on EU car and truck imports to 25% from 15%, adding new uncertainty for a sector already hit by rising costs linked to the war in Iran. The move matters for Portugal because, while its direct exposure to the US is limited, the country’s car and components makers are closely tied to European supply chains, especially Germany.
José Couto, head of AFIA, the association representing automotive suppliers, told ECO that the sector is now dealing with “tariffs on top of tariffs” and warned that component orders are likely to fall after a weak first quarter. Portugal’s automotive components exports totalled €3 billion in the first quarter, down 1.4% from a year earlier, with sales to both the US and Germany declining, according to the figures cited in the report.
Couto said the latest tariff threat could force companies to revise production and investment plans in Europe. He also said costs are rising across energy, logistics and raw materials, with the overall increase reaching 10% to 12% in the best-case scenarios. Some suppliers are no longer giving delivery deadlines, he added, pointing to growing pessimism in production planning.
Hélder Pedro, secretary-general of ACAP, the Portuguese automotive association, also described the announcement as negative for the sector, saying it creates more uncertainty and adds pressure to the EU-US trade relationship. He said Portugal is the EU’s seventh-largest vehicle producer, but because the national industry mainly exports within the European Union, any slowdown in the bloc’s economy would reduce demand for Portuguese-made vehicles.
Originally published at Eco.pt