In truth, the European Automobile Manufacturers’ Association (ACEA) is sounding alarm bells. Particularly in their sights is former U.S. President Donald Trump’s recent auto tariff announcement. On Wednesday, Trump revealed his intention to slap a 25% tariff on. This new tax will affect every property carrier service vehicle and every foreign-produced auto part brought into the United States, beginning on April 2. Opposition from the German automotive sector and European officials to this decision is fierce. They caution that it would further raise global trade tensions.
German Economy Minister Robert Habeck is calling on the European Union to respond in kind. He goes further than that, calling for a “decisive response” to Trump’s tariff announcement. He repeated the point that the tariffs would be damaging for Germany’s car manufacturing sector. They’ll hurt the rest of the EU and the U.S. economy, as well as global trade.
“The announcement of high tariffs on cars and car parts is bad news for German carmakers, for the German economy, for the EU, but also for the US.” – Robert Habeck, German Economy Minister
German ambassador Miguel Berger criticized the tariffs as “unjustified.” He claimed that they plan to rework international trade simply to benefit U.S. investments. He cautioned against the unintended consequences such actions could have on innovation and the burden they would impose upon industry and consumers.
“Tariffs will do huge damage to industry and consumers. We need to engage in talks & be ready for a strong, united response.” – Miguel Berger, German ambassador to the U.K.
ACEA Director General Sigrid de Vries echoed these sentiments, highlighting the need for dialogue between the EU and the U.S. to avoid the damaging consequences of a trade war.
“The EU and the US must engage in dialogue to find an immediate resolution to avert tariffs and the damaging consequences of a trade war.” – Sigrid de Vries, ACEA Director General
Even without the proposed tariffs on cars, financial markets are already jittery. On Thursday morning, European automaker stocks were crashing, following the bloodshed already seen in Asia overnight. All in all, it’s a tumultuous time for Germany’s car industry. Domestic players like Volkswagen, Mercedes-Benz Group and BMW have come with profit warnings in recent days, as they all blame economic softness and cooling consumption inside of China.
“The tariffs, which are scheduled to take effect on April 2, will place a significant burden on both companies and the automotive industry’s closely interwoven global supply chains—with negative consequences, especially for consumers—including in North America.” – Hildegard Müller, president of the German Association of the Automotive Industry (VDA)
Volvo Cars has stated that they are currently assessing the impact of these tariff changes as announced by the Trump administration.
“Volvo Cars follows the developments in different markets including the US. We follow government rules and pay all required duties on all imported vehicles and on all parts as required by law.” – Volvo Cars spokesperson
As a response to the new US tariffs on e-bikes, German Economy Minister Habeck underlined the importance of a coordinated EU reaction. He wants to make sure that they stand firm against U.S. attempts to intimidate them.
“It is now crucial that the EU delivers a decisive response to the tariffs – it must be clear that we will not back down in the face of the US. Strength and self-confidence are required.” – Robert Habeck, German Economy Minister