The Tell: U.S. labor market has a bigger impact on Europe’s auto makers than tariff spats, says Morningstar

The U.S. unemployment rate could have a bigger impact on European car makers than a possible change in price because of President Trump’s threat to impose 25% tariffs on them, according to a new report from Morningstar.

The equity research team found that for every percentage point change in real, new auto consumer-price index (CPI) and in the rate of unemployment, U.S. light vehicle demand varied on average by around 116,000 and 928,000 annual units respectively since 1980.

At present, the EU imposes a 10% tariff on imported U.S. cars, while the U.S. tacks on a 2.5% tariff on passenger cars made in Europe and a 25% tariff on imported pickup trucks.

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