President Donald Trump's tariffs on auto imports will deal a heavy blow to European carmakers, especially German manufacturers, which rely on the US markets for a big chunk of their profits.
The move comes as the continent's automakers have already seen their earnings slump in the past year, with some such as Volkswagen, Mercedes or BMW struggling in another key foreign market, China.
European automakers exported 750,000 cars to the United States last years, worth in total 38.5 billion euros, according to the European Automobile Manufacturers’ Association, known as ACEA.
Starting on April 3, importers will have to pay a tariff of 25 percent for all cars produced abroad.
The tariffs could "quickly cause several billion euros in losses and put as many as 25,000 jobs in Europe at risk", according to global consulting firm Kearney.
Ferrari price hike
American consumers may also pay a hefty bill: Car prices could increase by as much as $10,000, according to a Bank of America analysis.
German automakers, which account for almost two thirds of European exports, would be badly hit.
"A 25 percent tariff will be quite damaging for Germany, where auto exports to the US account for close to half a percent of value added in the economy," said Andrew Kenningham, chief European economist at Capital Economics research firm.
"These sales could plausibly fall by 50% or so," he added.
The German automakers association, VDA, said the tariffs send "a fatal signal for free trade" as they will "place a significant burden on businesses and global supply chains".
Credit ratings firm Moody's said last month that automakers could absorb some of the tariff costs through their existing prices.
This would be easier for pricier and more profitable models, but the size of the tariff leaves little space for profit margins.
Italian sportscar maker Ferrari said Wednesday that, after the tariffs come into force, it would increase prices by up to 10 percent for models excluding the Ferrari 296, SF90 and Roma.