A Volkswagen (VW) Passat R car (L) and a Golf GTI car are pictured in the tower storage facility of German carmaker Volkswagen at the company’s headquarters in Wolfsburg, central Germany, on March 11, 2025.
Ronny Hartmann | Afp | Getty Images
Germany’s economy minister and auto industry lambasted U.S. President Donald Trump’s plans to impose sweeping 25% tariffs on U.S. car imports, saying the move sends a “fatal signal” to free and rules-based trade.
Trump on Wednesday said he would implement tariffs on all vehicles and foreign-made auto parts imported into the U.S., as part of measures set to come into force from April 2.
The duties, which coincide with an even broader push on levies starting next week, represent a major escalation in an already brewing global trade war.
German Economy Minister Robert Habeck called for the European Union to provide a “decisive response” to Trump’s latest tariff announcement, saying the levies “ultimately harm the US and the EU, and global trade as a whole.”
“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,” Habeck said Thursday in a Google-translated statement.
“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,” he added.
European auto stocks traded sharply lower on Thursday morning, tracking auto losses in Asia overnight.
French car parts supplier Valeo traded more than 5% lower at around 9 a.m. London time (5 a.m. ET), while Milan-listed Stellantis and Germany’s Mercedes-Benz Group and Porsche all fell around 4%.
“The announced additional US tariffs of 25% on all passenger cars and light commercial vehicles not manufactured in the US send a fatal signal for free, rules-based trade,” Hildegard Müller, president of the German Association of the Automotive Industry (VDA), said in a statement out Wednesday.
“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,” Müller said.
The VDA’s Müller underlined the economic importance of free and fair trade to both sides of the transatlantic partnership and called for immediate negotiations between the U.S. and EU on a bilateral agreement.
“The risk of a global trade conflict – with negative impacts on the global economy and growth, prosperity, jobs, and consumer prices – is high on all sides,” Müller said.
‘Unjustified’
Analysts have previously warned Germany’s auto sector appears to be significantly exposed to U.S. tariffs, noting that the country was — by some distance — Europe’s largest exporter of passenger cars to the U.S. in 2023.
Germany’s Volkswagen, Mercedes-Benz Group and BMW have all issued profit warnings in recent months, citing economic weakness and sluggish demand in China, the world’s largest car market.
Miguel Berger, German ambassador to the U.K., said tariffs on automotive imports to the U.S. were “unjustified” and an attempt to reorganize international trade “to the sole advantage of investments in the U.S.”
“Tariffs will do huge damage to industry and consumers. We need to engage in talks & be ready for a strong, united response,” Berger said Thursday on the X social media platform.
Cars destined for export stand on railway cars at Bremerhaven Port before being loaded onto ships on February 27, 2025 in Bremerhaven, Germany.
Sean Gallup | Getty Images News | Getty Images
The European Automobile Manufacturers’ Association (ACEA) said it was “deeply concerned” by Trump’s proposed auto tariffs. The ACEA, a car lobby group, represents the likes of BMW, Ferrari, Renault, Volkswagen and Volvo.
“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,” ACEA Director General Sigrid de Vries said in a statement.
Sweden’s Volvo Cars meanwhile said on Thursday that it was “looking into the effects of the changes in tariffs” 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,” a Volvo Cars spokesperson told CNBC over email.
“It’s too soon to comment further at this stage,” they added.