A US President, Donald Trump, has announced drastic special tariffs on all automobile imports to the US. According to the White House, the measures are aimed at “protecting the American automotive industry” as “excessive imports are threatening the domestic industrial base and supply chains.” EU Commission President Von der Leyen expressed deep regret over the decision and the President of the German Association of the Automotive Industry (VDA) described the move as a “fatal signal for free and rule-based trade.”
The tariffs, which will take effect on April 3, will be 25% on “imported passenger cars (limousines, SUVs, crossovers, minivans, light trucks) and important auto parts (engines, transmissions, parts of the power train and electrical components).” The announcement also states that the tariffs can be extended to further parts “as needed.”
The tariffs will apply not only to finished vehicles but also to imported components that are assembled into vehicles in American auto plants. This will affect not only foreign but also American brands like Ford Motor and General Motors, as they produce a part of their vehicles in Canada or Mexico.
US media highlight that currently, almost half of all vehicles sold in the United States are imported and about 60% of the components for vehicles assembled in the United States come from abroad, which could significantly drive up US auto prices, already made more expensive by the inflation.
According to the New York Times, Mexico imports the largest number of vehicles to the United States, followed by Japan, South Korea, Canada and Germany.
In his typical manner, the US President stated in the White House press conference that the tariffs would “encourage” manufacturers and their suppliers to set up shop in the United States, saying, “But if you build your car in the United States, there’s no tariff. It will be good for everyone who has a plant in the United States.”
Trump also warned, “We will hold countries accountable for taking our jobs and our wealth away from us in our land.” In an X-Posting, Ursula von der Leyen for the EU Commission stated, “I deeply regret the decision of the US to impose tariffs on EU automobile exports. Tariffs are taxes – bad for companies, worse for consumers in the US and in the EU. The EU will continue to seek negotiated solutions and will uphold its economic interests.”
Hildegard Müller, President of the German Association of the Automotive Industry (VDA), stated in a first reaction, “The tariffs, which are to take effect on April 2, will pose a significant burden on both companies and the globally intertwined supply chains of the automotive industry, with negative consequences primarily for consumers – also in North America.”
T-Online summarizes the tariff’s impact, stating, “According to data from the International Trade Administration, 784,889 European vehicles were sold in the US last year. 446,566 of these vehicles came from Germany. This makes Germany the EU’s largest production site in the US market. Conversely, 217,230 vehicles from the US were brought to Europe.”
The German automotive industry is calling for immediate negotiations between the US and the EU on a bilateral agreement. Ursula von der Leyen stated, “As a large trading power and strong community of 27 member states, the EU will protect its workers, companies and consumers in the entire European Union.