Tensions between the United States and Europe are running high again as President Donald Trump threatens sky-high import duties on European cars.
German car manufacturers such as BMW, Mercedes-Benz and Volkswagen in particular are at risk of becoming victims of Trump's protectionist policies, as he once again focuses on his America First strategy. Trump, who will begin his second term in early 2025, had already stated during his election campaign that he would protect “American jobs and industry at all costs.”
Now that he is back in the White House, he is stepping up his threats. The US government is currently investigating the introduction of import tariffs of up to 25 percent on European cars, a measure that could completely disrupt the car trade between the EU and the US.
According to White House sources, tariffs on Japanese and South Korean automakers are also being considered. Trump has repeatedly complained that the United States has an unfavorable trade balance with the EU and that European manufacturers profit excessively from the American market. At a rally in Ohio, he again expressed his frustrations: “We have allowed Europe to destroy our auto industry for years. That stops now. We are going to tax them until they come back to America.”
German car manufacturers under fire
The announced import duties will hit the German car industry particularly hard. Germany exports more than 40 billion euros worth of vehicles to the US each year, with BMW, Mercedes-Benz and Volkswagen holding significant market shares. If the tariffs go ahead, prices of European cars in the US will rise sharply, seriously endangering the competitive position of German brands.
However, BMW, which has a huge factory in Spartanburg, South Carolina, fears that the measures will backfire. “Many of our cars are produced in the U.S. and exported from there to other markets. Additional tariffs would disrupt the entire industry,” a BMW spokesman said. Mercedes-Benz and Volkswagen have expressed similar concerns, stressing that they have been investing billions in the U.S. economy for years.
Analysts warn that the tariffs will also hit American consumers. Prices of luxury cars and popular models from Europe will rise sharply, forcing buyers to look for alternatives. At the same time, job losses at American suppliers and auto factories are looming, a risk that Trump seems to ignore.
tough countermeasures
In Europe, Trump’s threat has been met with little enthusiasm. EU Trade Commissioner Valdis Dombrovskis warned that Brussels would not hesitate to take countermeasures if the US went ahead with the tariffs. “We remain committed to fair trade, but if the US chooses to escalate, we will respond appropriately,” Dombrovskis said at a press conference in Brussels.
Potential EU countermeasures could target iconic American products such as motorcycles, whiskey and agricultural products. This scenario is reminiscent of the trade war during Trump’s first term, when the EU threatened billions in countertariffs in retaliation for his protectionist trade policies.
Trade experts warn that an escalation of tensions between the US and Europe could have a negative impact on global trade. Higher tariffs will increase costs for both producers and consumers and could disrupt global supply chains.
Economists fear that Trump’s protectionist policies will not only hit European exports, but could also drive up production prices in the US. American automakers like Ford and General Motors still use imported parts, and higher tariffs could hit them as well. This could lead to higher prices for American cars, which ironically hurts the domestic market.
Despite the criticism, Trump seems determined to push through his tough trade policy. With his promise to “bring jobs back to America,” he is putting international relations on edge. The coming months will be crucial for trade policy between the US and Europe, but one thing is certain: the threat of higher import tariffs hangs like a dark cloud over the automotive sector.
