Germany, along with other major car and car parts suppliers to the United States, is contemplating retaliatory measures in response to President Donald Trump’s recently announced blanket 25% import tariffs on vehicles.
On Thursday, German Vice Chancellor and Economy Minister Robert Habeck urged a robust reaction from the European Union (EU) to these tariffs, stating, “It must be clear that we will not give in to the US. We need to show strength and self-confidence.” Trump’s tariffs are set to take effect on April 2.
While Trump claims that these auto tariffs are intended to protect US businesses and bolster domestic manufacturing, Habeck warned that they would spell “bad news” not only for the US but also for German car manufacturers, the German economy, and the EU as a whole. European Commission President Ursula von der Leyen echoed this sentiment, calling Trump’s tariffs “bad for businesses, worse for consumers.”
Response from various European nations has also been notable. France’s Finance Minister Eric Lombard called for the EU to raise tariffs on US products as a counter-measure. In contrast, the UK government’s Finance Minister Rachel Reeves stated that the country is not planning retaliatory measures “at the moment,” as they seek to secure a better trading relationship with the US.
Half of the cars sold in the United States are manufactured domestically, and among imported vehicles, about 50% come from Mexico and Canada. Japan, South Korea, and Germany are also key suppliers. Japanese Prime Minister Shigeru Ishiba has called the tariffs “extremely regrettable,” emphasising Japan’s significant investments and job creation in the US.
South Korea’s Trade and Industry Minister Ahn Duk-geun convened an emergency meeting with major automakers, asserting that the government will collaborate closely with the industry to create countermeasures and unveil a comprehensive emergency response plan for the auto sector in April.
These new tariffs will compound existing levies imposed by Trump on neighbouring countries. Canadian Prime Minister Mark Carney is convening his cabinet to discuss what he termed a “direct attack” on Canadian workers.
In the US auto sector, Elon Musk, CEO of Tesla, cautioned that while Trump indicated the tariffs could be net neutral for his company, the costs would not be insignificant. “To be clear, this will affect the price of parts in Tesla cars that come from other countries,” Musk stated on X.
The Center for Automotive Research has estimated that US tariffs could lead to car price increases of thousands of dollars and adversely impact jobs. However, Peter Navarro, Trump’s senior trade counsellor, dismissed these concerns, arguing that “foreign trade cheaters” have reduced America’s manufacturing sector to a “lower wage assembly operation for foreign parts.”
Source : DW
