(updated version)
BRUSSELS/BERLIN/WASHINGTON (dpa-AFX) - A sharp hike in US tariffs on EU-manufactured vehicles is looming for the coming week. The move is expected to hit German automakers particularly hard. Both the European Union and industry leaders have issued a stinging critique of the tariff increases announced by US President Donald Trump. The EU Commission is reserving the right to take retaliatory measures should Trump follow through on his threats.
Bernd Lange, Chairman of the European Parliament's Committee on International Trade, called Trump's announcement unacceptable. The German Association of the Automotive Industry (VDA) described Trump's move as 'a renewed and serious strain on transatlantic relations'.
On Friday, Trump announced on the Truth Social platform that he intends to raise tariffs on cars and trucks imported from the EU to the US from 15 to 25 percent starting next week. He justified the move by alleging that the EU is failing to comply with the agreed trade deal.
Clemens Fuest, President of the Ifo Institute, warned of significant risks to the German economy. The economist fears serious consequences should the EU, in turn, impose tariffs on US products. Fuest told the 'Bild' newspaper: 'If this escalates into a new trade war, Germany faces the threat of a recession in 2026.' Jens Südekum, an advisor to the Federal Ministry of Finance, advised a wait-and-see approach. He suggested first verifying whether the announced US tariffs are actually levied. In such an event, he advocated for 'appropriate countermeasures' by the EU.
Marcel Fratzscher, President of the German Institute for Economic Research (DIW), called for a tough counter-reaction. 'Trump is currently weak domestically; therefore, now is the time to offset disadvantages through retaliatory tariffs, particularly by taxing US tech companies, and to position ourselves better for negotiations,' Fratzscher told 'Handelsblatt'. He argued that Trump exploits constant concessions as a sign of weakness.
EU Commission reserves the right to retaliate
A spokesperson for the EU Commission stated that if the US takes measures that contradict the joint trade agreement, the EU reserves 'all options to protect its interests'. The spokesperson assured that the EU is implementing its commitments in accordance with standard legislative practice and is keeping the US administration fully informed throughout the process.
Lange stated that the European Parliament remains committed to the agreement and is working on its implementation. 'While the EU fulfills its obligations, the US side repeatedly breaks its promises,' he wrote on the X platform.
VDA President Hildegard Müller emphasized: 'The trade agreement agreed upon between the EU and the USA must be upheld by both sides.' She added that Brussels must 'finally' implement the arrangements. The additional levies would hit the German and European automotive industries hard in an already strained environment. At the same time, the measures could also impact consumers in the USA, she noted. The automotive industry is calling on Washington and Brussels for de-escalation and swift talks.
The announced 25 percent tariffs on new cars from the EU could result in additional costs of approximately 2.5 billion euros annually for German automotive production, according to calculations by the Center Automotive Research (CAR) in Bochum. CAR Director Ferdinand Dudenhöffer sees Germany clearly in Trump's crosshairs. 'Since exports from foreign automakers to the USA are negligible, Trump's new tariff threats can be interpreted as the beginning of an economic war against Germany,' he emphasized.
The Federation of German Industries (BDI) stated: 'The American side is damaging mutual trust with constant new provocations'. The trade agreement between the EU and the USA must be respected by both sides. It was also made clear: 'European legislation and trade policy are developed through transparent, rule-of-law procedures, and exerting pressure on key industries through unannounced punitive measures is inappropriate.'
Expert: Social media posts are not law
Simon Evenett, a trade expert at the private IMD Business School, told the BBC: 'Those who believe that this (US) administration does not stick to any agreement will feel vindicated.' However, he noted that social media posts do not constitute law.
Last summer, Trump and EU Commission President Ursula von der Leyen agreed in a framework deal to a 15 percent cap on most EU goods imported into the USA. This rate was also intended to apply to European cars and auto parts. In return, the EU committed to eliminating tariffs on US industrial goods and facilitating market access for US agricultural products such as pork and dairy.
Strained relations
However, uncertainty following a court ruling that declared many US tariffs illegal had slowed the implementation of the tariff deal. In March, the European Parliament announced its intention to attach strict conditions to the further implementation of the agreement with the USA. For full execution, member states must also approve the relevant regulations.
According to Trump, cars and trucks from EU manufacturers produced within the United States are exempt from the levies. Through this, the US President aims to encourage automakers worldwide to produce more in the USA despite higher manufacturing costs.
Relations between the USA and European countries have been strained recently. The US President has criticized what he perceives as a lack of European support in the conflict with Iran. In recent days, Trump has verbally attacked Chancellor Friedrich Merz (CDU) several times after the latter expressed criticism regarding the US offensive against Iran. Meanwhile, the US government has ordered the partial withdrawal of troops from Germany./hgo/DP/he
