Auto Industry Expert Warns of Job Losses in the Wake of US President’s Tariff Policy
Ferdinand Dudenhöffer, a leading expert in the automotive industry, believes that the tariff policy of US President Donald Trump will lead to job losses in the sector. The head of the Bochum-based Car Institute told the Neue Osnabrücker Zeitung that German car manufacturers will have “no other choice” but to invest in the US, the world’s second-largest automotive market and build production facilities there. This, in turn, will lead to job losses in Germany.
According to Dudenhöffer, Volkswagen (VW) will be particularly hard hit, with Audi, which does not have a US production facility, likely to suffer the most. VW will have to cut costs elsewhere to fund its US investments, which could lead to job losses in Mexico, where the company has a large production facility.
Over the weekend, Trump imposed 25% tariffs on Mexican and Canadian imports, a move that could affect the operations of German car manufacturers such as VW, Mercedes and BMW, which have production facilities in the US and Mexico. The companies import hundreds of thousands of vehicles from Mexico to the US every year.
The US and Mexico have since agreed to suspend the tariffs for a month. However, Dudenhöffer is not optimistic that the situation will improve in the future. He believes that the auto industry cannot afford to wait for a potential trade conflict to be resolved by a future president, as the US market is too important. Instead, production in Europe may be scaled back.
VW is currently investing heavily in a battery plant in Canada and a new US production facility for its Scout brand. The company has managed to increase its sales in the US, but still lags behind in terms of market share, with a mere four percent of the US market.