German car industry calls for a deal after Trump tariff threat
EU trade chief is in Washington for talks after Trump threatens to impose car tariffs of about 25%
19 February 2025 - 16:58
byChristian Kraemer, Andrea Shalal and Nandita Bose
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Electric cars on a production line in Emden, Germany, February 18, 2025 Picture: FOCKE STRANMANN/GETTY IMAGES
Berlin — US President Donald Trump’s threats to impose tariffs of about 25% on car imports were a “provocation”, Germany’s car lobby group said on Wednesday, calling on Brussels to strike a deal with what is its biggest export market.
Trump said late on Tuesday he intended to impose vehicle tariffs “in the neighbourhood of 25%” and similar duties on semiconductors and pharmaceutical imports, the latest in a series of measures threatening to upend international trade.
“Tariffs as a negotiating instrument are the wrong tool. The risk of a global trade conflict with negative consequences for the global economy is high,” Hildegard Mueller, president of the VDA, said.
Volker Treier, head of foreign trade at the German Chamber of Commerce and Industry, said potential tariffs on car imports as outlined by Trump would significantly hurt Germany’s automotive industry in what is an “already bumpy road”.
According to VDA and German Chamber of Commerce and Industry statistics, about 13% of German car exports go to the US, more than to any other country. Germany’s automotive industry, including carmakers and suppliers, employs 138,000 staff in the US.
On Friday, Trump said levies on vehicles would come as soon as April 2, the day after members of his cabinet are due to deliver reports to him outlining options for a range of import duties as he seeks to reshape global trade.
Trump has long railed against what he calls the unfair treatment of US automotive exports in foreign markets.
The EU, for instance, collects a 10% duty on vehicle imports, four times the US passenger car tariff rate of 2.5%. The US, though, collects a 25% tariff on pickup trucks from countries other than Mexico and Canada, a tax that makes the vehicles highly profitable for Detroit vehicle makers.
EU trade chief Maros Sefcovic will meet US counterparts — commerce secretary Howard Lutnick, Trump’s nominee to be US trade representative Jamieson Greer and national economic council director Kevin Hassett — in Washington on Wednesday to discuss the various tariffs threatened by Trump.
Asked whether the EU could avoid reciprocal tariffs he proposed last week, Trump repeated his claim that the EU had already signalled it would lower its tariffs on US cars to the US rate, though EU legislators have denied doing so.
He said he would press EU officials to increase US imports of cars and other products.
Trump told reporters at his Mar-a-Lago estate in Florida late on Tuesday that sectoral tariffs on pharmaceuticals and semiconductor chips would also start at “25% or higher”, rising substantially over the course of a year.
He did not provide a date for announcing those duties and said he wanted to provide some time for drug and chip makers to set up US factories so that they can avoid tariffs.
Trump said he expected some of the biggest companies in the world to announce new investments in the US in the next couple of weeks. He provided no further details.
Since his inauguration four weeks ago, Trump has imposed a 10% tariff on all imports from China, on top of existing levies, over China's failure to halt fentanyl trafficking. He also announced, and then delayed for a month, 25% tariffs on goods from Mexico and nonenergy imports from Canada.
He has also set a March 12 start date for 25% tariffs on all imported steel and aluminium, eliminating exemptions for Canada, Mexico, the EU and other trading partners. Trump also announced that these tariffs would apply to hundreds of imported downstream products made of steel and aluminium, from electrical conduit tubing to bulldozer blades.
Last week, he directed his economic team to devise plans to impose reciprocal tariffs that match the tariff rates of every country product-by-product.
An vehicle import tariff of 25% would be a game-changer for a global vehicle industry that is already reeling from uncertainty caused by Trump's tariff drama.
A similar drama played out in 2018 and 2019 during Trump’s first term, when the commerce department conducted a national security investigation into auto imports and found that they weakened the domestic industrial base.
Trump had threatened car tariffs of 25% at that time, but ultimately took no action, allowing the tariff authority from that probe to expire.
But some of the research that went into the 2018 investigation may be reused or updated as part of a new automotive tariff effort.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
German car industry calls for a deal after Trump tariff threat
EU trade chief is in Washington for talks after Trump threatens to impose car tariffs of about 25%
Berlin — US President Donald Trump’s threats to impose tariffs of about 25% on car imports were a “provocation”, Germany’s car lobby group said on Wednesday, calling on Brussels to strike a deal with what is its biggest export market.
Trump said late on Tuesday he intended to impose vehicle tariffs “in the neighbourhood of 25%” and similar duties on semiconductors and pharmaceutical imports, the latest in a series of measures threatening to upend international trade.
“Tariffs as a negotiating instrument are the wrong tool. The risk of a global trade conflict with negative consequences for the global economy is high,” Hildegard Mueller, president of the VDA, said.
Volker Treier, head of foreign trade at the German Chamber of Commerce and Industry, said potential tariffs on car imports as outlined by Trump would significantly hurt Germany’s automotive industry in what is an “already bumpy road”.
According to VDA and German Chamber of Commerce and Industry statistics, about 13% of German car exports go to the US, more than to any other country. Germany’s automotive industry, including carmakers and suppliers, employs 138,000 staff in the US.
On Friday, Trump said levies on vehicles would come as soon as April 2, the day after members of his cabinet are due to deliver reports to him outlining options for a range of import duties as he seeks to reshape global trade.
Trump has long railed against what he calls the unfair treatment of US automotive exports in foreign markets.
The EU, for instance, collects a 10% duty on vehicle imports, four times the US passenger car tariff rate of 2.5%. The US, though, collects a 25% tariff on pickup trucks from countries other than Mexico and Canada, a tax that makes the vehicles highly profitable for Detroit vehicle makers.
EU trade chief Maros Sefcovic will meet US counterparts — commerce secretary Howard Lutnick, Trump’s nominee to be US trade representative Jamieson Greer and national economic council director Kevin Hassett — in Washington on Wednesday to discuss the various tariffs threatened by Trump.
Asked whether the EU could avoid reciprocal tariffs he proposed last week, Trump repeated his claim that the EU had already signalled it would lower its tariffs on US cars to the US rate, though EU legislators have denied doing so.
He said he would press EU officials to increase US imports of cars and other products.
Trump told reporters at his Mar-a-Lago estate in Florida late on Tuesday that sectoral tariffs on pharmaceuticals and semiconductor chips would also start at “25% or higher”, rising substantially over the course of a year.
He did not provide a date for announcing those duties and said he wanted to provide some time for drug and chip makers to set up US factories so that they can avoid tariffs.
Trump said he expected some of the biggest companies in the world to announce new investments in the US in the next couple of weeks. He provided no further details.
Since his inauguration four weeks ago, Trump has imposed a 10% tariff on all imports from China, on top of existing levies, over China's failure to halt fentanyl trafficking. He also announced, and then delayed for a month, 25% tariffs on goods from Mexico and nonenergy imports from Canada.
He has also set a March 12 start date for 25% tariffs on all imported steel and aluminium, eliminating exemptions for Canada, Mexico, the EU and other trading partners. Trump also announced that these tariffs would apply to hundreds of imported downstream products made of steel and aluminium, from electrical conduit tubing to bulldozer blades.
Last week, he directed his economic team to devise plans to impose reciprocal tariffs that match the tariff rates of every country product-by-product.
An vehicle import tariff of 25% would be a game-changer for a global vehicle industry that is already reeling from uncertainty caused by Trump's tariff drama.
A similar drama played out in 2018 and 2019 during Trump’s first term, when the commerce department conducted a national security investigation into auto imports and found that they weakened the domestic industrial base.
Trump had threatened car tariffs of 25% at that time, but ultimately took no action, allowing the tariff authority from that probe to expire.
But some of the research that went into the 2018 investigation may be reused or updated as part of a new automotive tariff effort.
Reuters
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