How the EU’s reliance on China has exposed carmakers to trade shocks

A Volkswagen Touran on the production line in Wolfsburg, Germany. Many EU carmakers rely on global supply chains that include Chinese components. AP - Joerg Sarbach

Caught in the middle of a deepening trade row between the United States and China, Europe’s car industry is under growing strain. The latest round of US tariffs on Chinese vehicles and components is shaking up global supply chains – and putting French and European carmakers in a tough spot.

For companies like Stellantis and Renault, which rely heavily on Chinese suppliers, the ripple effects are already being felt. Higher costs, delayed shipments and tougher choices about where to invest next are all part of the fallout.