“Gigantic costs” – the German car industry is suffering in the whirlwind of Trump’s new tariff threats

The umbrella organization of the German automotive industry VDA will cause massive difficulties for the industrial sector if Donald Trump’s the latest customs threat comes true. Over the weekend, Trump announced new tariff measures that threaten to raise import duties on vehicles shipped from Europe to the United States from the current 15 percent to 25 percent.

“The new tariffs would cause enormous costs for the German and European automotive industry in already difficult times”, VDA chairman Hildegard Müller stated.

Trump’s decisions would also affect American consumers, he added.

Kiel Institute of World Economy estimated that the new tariff bomb could cost the German car industry up to 15 billion dollars, Automotive News Europe tells.

“The effects would be profound”, Moritz Schularick anticipate. In the longer term, the losses of the German automotive industry could rise to up to 30 billion dollars.

New billionaires

The new round of tariffs threatens to reopen the wounds of the thin trade agreement between the parties last spring. At that time, the EU agreed to the 15 percent tariffs on imported cars dictated by Trump.

On Labor Day, Trump threatened on his Truth Social platform to raise tariffs on vehicles imported from Europe to 25 percent. For European car manufacturers, tougher tariffs than before would be a new burden rising into the billions again.

According to Müller, in 2024 alone, more than 34.5 billion dollars worth of cars and car parts were shipped from Germany across the Atlantic.

Trump claims that the EU neglected the obligations of the trade agreement it concluded with the United States last year.

Factories in block letters

Perhaps more revealing was the suggestion that vehicles manufactured in the United States would be exempt from tariffs.

“It is known to everyone and agreed that there will be NO TARIFFS for cars manufactured in American factories,” the president wrote on a sticky note.

Trump thinks the new tariffs will force European car manufacturers to move their factories “even faster to the United States”.

Trump sticks to his claim that the EU has not acted in accordance with the terms of the agreement. He did not present other grounds for his claims.

Chief Advisor to the German Trade Minister Jens Südekum however, he called for calm in the face of Trump’s threat.

“Now the EU should just hold back and see what happens. As we know, Trump is very sensitive to threatening tariffs and withdrawing them immediately,” he said.