A Volkswagen (VW) Passat R and a Golf GTI are displayed in the tower storage facility of the German automotive manufacturer Volkswagen at its headquarters in Wolfsburg, central Germany, on March 11, 2025.
Ronny Hartmann | Afp | Getty Images
Germany’s economy minister and the auto industry have criticized U.S. President Donald Trump’s plan to impose a significant 25% tariff on car imports, labeling the initiative as a “fatal signal” for free and rules-based trade.
On Wednesday, Trump announced the implementation of tariffs on all cars and foreign-made auto parts imported into the U.S., with measures set to take effect from April 2.
These duties coincide with a broader push for levies slated to begin next week, marking a considerable escalation in the ongoing global trade conflict.
German Economy Minister Robert Habeck urged the European Union to formulate a “decisive response” to Trump’s recent tariff declaration, asserting that the levies “ultimately damage the U.S., the EU, and global trade overall.”
“The announcement of steep tariffs on vehicles and parts is detrimental not only to German manufacturers but also to the German economy, the EU, and the U.S.,” Habeck stated on Thursday in a translated statement.
“It is vital that the EU responds firmly to the tariffs—showing that we will not yield to pressure from the U.S. is necessary for maintaining strength and confidence,” he emphasized.
European auto stocks experienced a significant decline on Thursday morning, reflecting losses among automakers in Asia overnight.
French auto parts supplier Valeo saw its shares drop over 5% around 9 a.m. London time (5 a.m. ET), while Milan-listed Stellantis, and Germany’s Mercedes-Benz Group and Porsche also fell approximately 4%.
“The newly announced 25% tariffs on all passenger cars and light commercial vehicles not manufactured in the U.S. deliver a damaging signal for free, rules-based trade,” stated Hildegard Müller, president of the German Association of the Automotive Industry (VDA), in a Wednesday statement.
“These tariffs, set to take effect on April 2, will impose a significant burden on companies and the interconnected global supply chains of the automotive industry, with adverse effects, particularly for consumers, including those in North America,” Müller elaborated.
Müller highlighted the vital role of free and fair trade in strengthening both sides of the transatlantic partnership and called for urgent negotiations between the U.S. and EU to reach a bilateral agreement.
“The danger of a global trade conflict—endangering the global economy, growth, jobs, and consumer prices—is pronounced for all parties involved,” Müller noted.
‘Unjustified’
Analysts have previously indicated that Germany’s automotive sector could face substantial risks due to U.S. tariffs, highlighting that the country was significantly Europe’s largest exporter of passenger vehicles to the U.S. in 2023.
German firms Volkswagen, Mercedes-Benz Group, and BMW all recently issued profit warnings due to economic softness and meager demand in China, the world’s biggest car market.
Miguel Berger, the German ambassador to the U.K., remarked that tariffs imposed on automotive imports to the U.S. were “unjustified” and represented an attempt to distort international trade in favor of U.S. investments.
“Tariffs will significantly harm industries and consumers. We must engage in discussions and prepare for a robust, united response,” Berger stated Thursday on the X social media platform.
Vehicles designated for export are seen on railway cars at Bremerhaven Port awaiting shipment on February 27, 2025, in Bremerhaven, Germany.
Sean Gallup | Getty Images News | Getty Images
The European Automobile Manufacturers’ Association (ACEA) expressed its “deep concern” regarding Trump’s proposed auto tariffs. This car lobby group represents notable manufacturers like BMW, Ferrari, Renault, Volkswagen, and Volvo.
“The EU and the U.S. must engage in discussions to find a swift resolution to prevent tariffs and the detrimental repercussions of a trade war,” urged ACEA Director General Sigrid de Vries in a statement.
Sweden’s Volvo Cars stated Thursday that it was “reviewing the implications of the announced changes in tariffs” as laid out by the Trump administration.
“Volvo Cars monitors developments across various markets, including the U.S. We adhere to government regulations and pay all necessary duties on imported vehicles and components as required by law,” a Volvo Cars representative informed CNBC via email.
“It is premature to make further comments at this time,” they added.
