Niche off-road vehicle brand, Ineos, slams European Union representatives’ lack of ability to negotiate lower U.S. tariffs on its vehicle imports now set at 25%.

Ineos CEO Lynn Calder claims the EU should have reacted sooner to the tariffs threatened by U.S. President Donald Trump and sought to negotiate equalization of auto tariffs between the two trading partners.

She repeats an earlier suggestion by BMW CEO Oliver Zipse who told a conference in January organized by the German Die Welt newspaper that Europe should drop its tariffs on imported U.S. autos from 10% to the 2.5% that European products pay to export to the U.S.

Calder suggests there could have been another way to level the tariff playing field between the two economies. Speaking to BBC Business she says: “My view is there was a deal to be done over reciprocal tariffs but our European politicians just sat on their hands.

“The rhetoric of playing the long game and waiting for inflation to hit U.S. consumers doesn’t really work for small brands like us who are fast growing, but the U.S. is our biggest market by quite some way, so we need action and we need it today.”

Calder advises that she would have negotiated level tariffs at a mutually agreed rate. She explains: “We could have agreed that the number is 5% on both sides of the Atlantic but we did not negotiate this and have ended up with a 25% tariff.”

Calder adds that while the company has always considered moving some manufacturing to the U.S. in future, it is not possible to do this at this fledgling stage of business. “We are just building up our manufacturing in Europe, so while we would consider this sometime in the future it’s not something we can do overnight.”

Calder says the company will have to pass on the cost of tariffs in the form of price hikes to U.S. customers if they remain implemented in full.

However, her comments may be seen as being too harsh by EU officials such as its trade chief Maroš Šefčovič who flew to Washington to offer deals on tariffs with the U.S.

The tariff imbalance in the auto sector has roots in decades of trade deals negotiated across multiple administrations. The EU imposes a 10% tariff on imported cars, primarily to protect its own domestic automotive industry—especially in countries like Germany, France, and Italy, where automakers like VW, Mercedes, BMW, Renault, and Fiat play a big economic role.

The 2.5% U.S. tariff on imported passenger cars dates back to the post-WWII trade agreements, particularly the General Agreement on Tariffs and Trade (GATT).

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In contrast, the 25% U.S. tariff on light trucks (like pickups) was introduced in 1964 as part of the so-called “Chicken Tax,” a retaliation against European tariffs on U.S. chicken exports. The EU removed their chicken tariffs, but the U.S. kept the truck tariff, which remains in place to this day, deterring foreign automakers from selling pickup trucks, commercial vans that qualify as "trucks," in the U.S., etc. unless they build the vehicles in the U.S.

The U.S. chose lower tariffs on passenger cars but kept high tariffs on trucks, where U.S. automakers dominate, and foreign competition is minimal.

U.S. automakers Ford and Tesla manufacture vehicles in the EU, but exact production figures are not available. GM left the EU in 2018 when it sold its GM Europe business to Stellantis. BMW, Mercedes-Benz and Volkswagen produced around one million vehicles in the U.S. in 2024.