New US tariffs: Up to 30 billion euros – that’s how a lot harm can be performed to the German auto trade | EUROtoday

According to economists, the upper tariffs introduced by US President Donald Trump on imports of autos from the EU might depress the already meager financial progress in Germany. “The effects would be substantial,” mentioned the President of the Kiel Institute for the World Economy (IfW), Moritz Schularick, to the Reuters information company on Saturday. Trump had beforehand introduced that he would enhance tariffs from 15 to 25 p.c subsequent week.

The German automotive sector can be notably affected by this, as an up to date mannequin calculation by the Kiel Institute for the World Economy (IfW) reveals. “In the short term, production losses are estimated at almost 15 billion euros, which would rise to around 30 billion euros in the long term,” mentioned IfW commerce professional Julian Hinz. This means a lack of actual added worth of round 0.3 p.c.

“Germany’s already slow growth rate would be hit hard,” is Hinz’s conclusion. The Kiel researchers count on financial progress of 0.8 p.c to this point this yr. According to the IfW mannequin calculation, different European economies with a robust automotive trade – together with Italy, Slovakia and Sweden – are additionally prone to report important losses.

Slovakia hit even more durable

However, by way of the general financial influence, Slovakia can be much more severely affected. The share of automotive manufacturing within the economic system’s actual added worth is considerably greater there than on this nation – this might shrink by 0.85 p.c within the brief time period, because the economists have calculated. However, the German economic system can be in second place with a decline of 0.3 p.c, adopted by Hungary and Sweden.

The chief advisor to Federal Finance Minister Lars Klingbeil (SPD), Jens Südekum, advises restraint in view of Trump’s new tariff threats. “The EU should just wait and see for now,” Südekum instructed the Reuters information company. “It is well known that Trump likes to quickly suspend or withdraw full-blown tariff threats.”

The President didn’t present a exact clarification as to why the EU is allegedly not adhering to the present commerce settlement with the USA. It can also be unclear whether or not the brand new tariff threats have any authorized foundation underneath the present case regulation of the US Supreme Court. “Everything seems quite impulsive,” mentioned the highest economist.

For economist Marcel Fratzscher, the renewed escalation within the commerce battle with the USA resulting from President Donald Trump’s tariff threats comes as no shock. “President Trump is exploiting Germany’s and Europe’s constant giving in as a weakness,” mentioned the President of the German Institute for Economic Research (DIW). “The fact that the European Union and the federal government have repeatedly given in in the conflict with Trump and let him have his way is now taking revenge again.”

They would now lastly have to indicate some spine and stand as much as Trump. This is the one method they may forestall a relentless escalation. “You cannot and must not allow yourself to be blackmailed any longer, otherwise the costs for the European economy and especially for German export companies will continue to rise,” warned Fratzscher.

Trump introduced on Friday on the Truth Social platform that he needed to extend tariffs on automobiles and vehicles imported into the USA from the EU to 25 p.c from subsequent week. He justified this with the accusation that the EU will not be sticking to the agreed commerce settlement.

A spokeswoman for the EU Commission, which is answerable for the commerce coverage of the neighborhood of states, mentioned it stays dedicated to “a predictable, mutually beneficial transatlantic relationship.” However, if the USA takes measures that will contradict the widespread commerce settlement, it reserves “all options to protect the EU’s interests”. The spokeswoman assured that the EU is implementing the commitments it has made in accordance with regular legislative apply and is at all times protecting the US authorities absolutely knowledgeable.

Bernd Lange, chairman of the Trade Committee within the European Parliament, mentioned the European Parliament stays dedicated to the settlement and is working to implement the settlement. “While the EU is fulfilling its obligations, the US side keeps breaking its promises,” he continued on the X platform.

The President of the Association of the Automotive Industry (VDA), Hildegard Müller, emphasised: “The trade agreement agreed between the EU and the USA must be adhered to by both sides.” Brussels should “finally” implement the agreements. The extra taxes would hit the German and European automotive trade arduous in an already tense scenario. At the identical time, the measures might additionally have an effect on customers within the USA, it mentioned.

Simon Evenett, a commerce professional on the personal enterprise faculty IMD Business School, instructed the British broadcaster BBC: “Those who believe that this (US) government will not abide by any agreement will be vindicated.” However, you will need to be aware that social media posts usually are not regulation, which is why Brussels needs to see the precise wording earlier than placing again.

Last summer season, Trump and EU Commission President Ursula von der Leyen agreed in a framework settlement on an higher restrict of 15 p.c on most EU items imports to the USA. The price also needs to apply to European automobiles and automotive elements. In return, the EU commits to eliminating tariffs on US industrial items and easing market entry for US agricultural merchandise similar to pork and dairy merchandise.

The USA is an important purchaser of products “Made in Germany”. Last yr, items value 146.2 billion euros had been exported there. That was 9.4 p.c lower than in 2024. The largest proportion of products exported to the USA final yr – regardless of important declines – had been motor autos and car elements: their worth totaled 28.5 billion euros, which was 17.8 p.c lower than in 2024.

This article was written for the WELT and Economic Competence Center Business Insider created.

Michael Fabricius offers with the true property and development trade within the financial competence heart of WELT and “Business Insider Germany” and writes about every thing that impacts house owners, tenants and traders. Together with Michael Höfling, he’s answerable for the true property publication “Question of Location”. You can him subscribe right here.