Germany’s car industry is preparing for a potential trade war as U.S. President Donald Trump considers imposing new tariffs on imports. The move would come in addition to the 25% tariffs already placed on imported cars and parts, adding to uncertainty in global markets.
While governments and exporters have been trying to anticipate Trump’s next steps, his shifting stance on tariffs has made it difficult to predict the outcome. The threat of escalating trade tensions has also fueled fears of a possible U.S. or even global recession.
The German Association of the Automotive Industry (VDA) has warned that U.S. factories depend on supplier networks in Canada and Mexico, meaning the impact of tariffs would reach far beyond Germany. VDA spokesperson Simon Schütz told Euronews that price increases would be inevitable—especially for U.S. consumers.
“In the long run, if the situation escalates, it will cost growth, prosperity, and potentially jobs on both sides of the Atlantic. That’s why finding a solution now is crucial,” he said.
German car manufacturers play a major role in the U.S. economy, employing over 140,000 people and producing more than 900,000 vehicles in U.S. factories each year, with half of them being exported.
“It also needs to be emphasised that even US manufacturers themselves are against these tariffs,” Schütz added. “So the US industry in general, if you look at stock market developments, views the current course of the US president very critically.”
Schütz also pointed out that tariffs are not the only issue affecting the industry.
“There are also geopolitical shifts that continue to affect us. This makes it all the more important for the incoming German government, which is currently in coalition negotiations, and the EU Commission to do their homework.”
He urged Germany and the EU to reduce bureaucracy and strengthen their global competitiveness, noting that Europe’s energy prices are three to five times higher than in the U.S. and China—posing a serious challenge for international business.
“I think it is important that Europe forms alliances and cooperates with partners who face similar challenges as we do, and that we advocate for global and free trade. History has shown that free trade creates winners and prosperity for all involved. That should now be our primary focus,” Schütz insisted.
Audi, part of the Volkswagen Group, echoed similar concerns in a written statement to Euronews, emphasizing the importance of transatlantic trade relations and calling for constructive talks. The company also highlighted its recent investment of more than $14 billion (€12.95 billion) in the U.S. market.
As uncertainty looms, Germany’s carmakers remain on edge, hoping for a diplomatic resolution to prevent further economic disruption.
