The uncertainty about US-Europe trade agreements has affected just about every industry, with automotive near the top of the list. Last week it seemed to be pretty much resolved with a 15% tariff to be applied on European vehicles going to the US. However, there is now a whole new level of uncertainty regarding the possibility of common emission and safety regulations. 

A joint statement put out by negotiating teams contained the lines, “The United States and the European Union commit to work together to reduce or eliminate non-tariff barriers. With respect to automobiles, the United States and the European Union intend to accept and provide mutual recognition to each other’s standards.”

The statement went on to say the parties will, “commit to enhance opportunities for technical cooperation between EU- and U.S.-domiciled standards development organizations with the objective of identifying and developing standards for the transatlantic marketplace in key sectors of mutual interest.”

The statement leaves much in the air, but has prompted some observers especially in the USA, to suggest the EU may back track on key emission and safety regulations that currently exclude many US made cars. For example, the Tesla Cyber Truck is not road legal in Europe because it has not, and cannot, pass European safety tests. 

Traditionally the EU has much higher pedestrian safety requirements for cars to be road legal, which US vehicles can often not meet. The US under the Trump administration has also seen emission standards reduced dramatically in recent months. 

So are we likely to see a mass influx of gas guzzling US pick-up trucks and cars invading Europe? It appears unlikely. Firstly, the EU is very heavily invested in emission reduction and could ill afford to drop standards now. It is also committed to improved pedestrian safety and is unlikely to back track on the significant progress made. 

Another consideration, often overlooked by US observers, is that the appetite for large US made vehicles in Europe is not that great, as these vehicles are often simply not practical for use on European roads and do not deliver the characteristics that European buyers like. 

As with anything involving the current US government, confusion and uncertainty still surrounds US European automotive trade, however, while some move toward more common standards may be possible, it would seem unlikely that the EU will be prepared to abandon its stricter regulations in pursuit of a little extra trade.