Germany warns of trade war after US announces tariffs on foreign carmakers

BERLIN

Germany on Friday warned of a potential trade war after US President Donald Trump announced a 25% tariff on automobile imports.

Germany aims to “prevent a customs spiral, a tariff war” and continues negotiations with the US to ease trade tensions, Economic Ministry spokesman Korbinian Wagner told reporters in Berlin.

Government spokesman Steffen Hebestreit echoed this sentiment, expressing cautious optimism. “At the moment, we are still hoping and relying on reaching an agreement in talks with the United States that might avert a trade war,” he added. ​​​​​​​

The White House said the tariffs, which are set to take effect April 3, are intended to “protect and strengthen” the US auto industry, claiming that it has been “undermined by excessive imports threatening America’s domestic industrial base and supply chains.”

European carmakers voice alarm

European automotive manufacturers on Thursday said they are “deeply concerned” by the new tariffs, which would also apply to some imported car parts.

“This comes at a watershed moment for our industry’s transformation and as fierce international competition mounts,” the European Automobile Manufacturers’ Association (ACEA) said in a statement.

Sigrid de Vries, the association’s director general, said European carmakers have invested in the US for decades, creating jobs, driving economic growth, and generating significant tax revenues.

“We urge President Trump to consider the negative impact of tariffs not only on global automakers but on US domestic manufacturing as well," she said.

The ACEA warned that tariffs would not only increase prices for US consumers but also affect manufacturers producing vehicles in the US for export markets due to higher costs of imported automotive parts.

The US is the second-largest market for EU vehicle exports after the UK, accounting for 22% of exports in 2024.