Experts say that the additional import tariffs on cars and trucks from the EU announced by US President Donald Trump will hit Germany particularly hard. The planned increase to 25 percent can be interpreted as “the beginning of an economic war against Germany,” declared automotive expert Ferdinand Dudenhöffer on Saturday. The German Association of the Automotive Industry (VDA) described Trump’s announcement as “another serious strain on transatlantic relations” and called for “de-escalation.” Trump justified the tariff increase by claiming that EU member states were violating the existing trade agreement – without, however, providing further details.
Industry expert Dudenhöffer warned that the anticipated additional costs are likely to further intensify the pressure on German manufacturers to relocate automotive production facilities out of Germany. While the strong German brands will probably be able to pass on some of the costs to US buyers through price increases, the automakers will be affected to varying degrees.
The head of the CAR research center in Bochum explained that the increase in tariffs from the current 15 percent to 25 percent will mean an additional financial burden of around €2.5 billion per year for new cars produced in Germany and exported to the US alone – bringing the total to approximately €6.14 billion. The measures could be interpreted as being specifically targeted at Germany, since the exports of other European automakers to the US are “insignificant.”
While BMW and Mercedes benefit from a degree of “tariff protection” due to their large, in-house production facilities in the US, the measure will fully impact brands without their own US manufacturing, such as Porsche and Audi. Dudenhöffer therefore assumes that the tariff increase will accelerate plans to build new plants in the United States.
The president of the German Association of the Automotive Industry (VDA), Hildegard Müller, described the impending additional costs for German manufacturers due to the tariffs as “enormous.” She added that these costs would likely also affect consumers in the US. “The automotive industry urgently calls on both sides to de-escalate and engage in swift negotiations,” Müller stated, referring to the EU and the US.
On Friday, US President Trump announced a significant increase in import tariffs on vehicles from the EU. “Because the European Union is not complying with our agreed trade agreement, I will be increasing tariffs on cars and trucks imported into the US from the European Union next week,” he wrote on his online service, TruthSocial. “The tariff rate will be raised to 25 percent.”
The US president, however, did not specify how he believes the EU is violating the agreed-upon trade agreement. At an event in the US state of Florida on Friday evening (local time), Trump accused German automakers, particularly Mercedes-Benz and BMW, of taking advantage of US citizens.
Trump’s tariff announcement came shortly after he sharply criticized German Chancellor Friedrich Merz (CDU). Trump called on Merz to focus on ending the war in Ukraine instead of “interfering” in Iran’s affairs. Furthermore, Merz should “fix his rotten country,” the US president declared on Thursday in online media.
The US president’s remarks followed comments by Merz regarding the Iran war. “An entire nation is being humiliated by the Iranian leadership,” Merz said on Monday, referring to the US negotiations with Iran to end the war, which is having global economic repercussions, particularly due to rising fuel prices. Furthermore, the Chancellor expressed the view that the US “obviously has no strategy” in the Iran war.
AFP translated by Blackout News