Trump tariffs would up US prices for German cars
February 19, 2025
The German Car Association (VDA) hailed on Wednesday automotive trade between the US and Germany, warning it could be impacted if US President Donald Trump imposes tariffs on the country or the automotive industry.
Trump has started his second term with a wide range of tariffs imposed on various countries, vowing to introduce more. The European Union and its largest economy are bracing for impact.
The automotive industry is a cornerstone of Germany's economy. In 2023, the sector made up 17% of Germany's total exports, making it the product group with the largest export share, according to figures from the Germany Trade and Invest (GTAI) office.
What did the VDA say?
In a statement by its president, Hildegard Müller, on the VDA's website on Wednesday, the association stressed the importance of trade and investment relations with the US.
"Further tariffs would directly hit the American economy and make products for US consumers more expensive," Müller said, adding that "a tariff of 25%, currently mooted by President Trump, is a provocation."
The association provided some key statistics on the German automotive industry in the United States.
It said that in 2023, German manufacturers produced more vehicles in the USA than ever before, over 900,000, and that around half of them were exported all over the world.
"The USA as an automotive location therefore also benefits from international trade and the commitment of the German automotive industry," Müller said.
The association also added that the German automotive industry employs some 138,000 people in the US.
The VDA also challenged Trump's criticism of the European sales tax, arguing that "the import sales tax that has to be paid at the border on import is exactly the same as the sales tax that has to be paid on a domestic purchase."
"Tariffs are the wrong negotiating tool," Müller said. "The risk of a global trade conflict with negative effects on the world economy is high."
The association urged the EU to enter dialogue with the US over the issue of potential tariffs.
Edited by: Sean M. Sinico