VDA President Hildegard Müller:
“The transatlantic partnership and free and fair trade are of great economic importance for both sides and a guarantee of growth, prosperity and jobs on both sides of the Atlantic.
The German automotive industry has been present and successful in the USA for decades. The USA is an important part of the German automotive industry’s production network, and the global market is also served from there. In 2023, German manufacturers produced more vehicles in the USA than ever before. Of the more than 900,000 vehicles produced in the USA, around half are 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.
In 2023, cars worth €8bn were exported from the USA to Germany (193,000 cars). This puts cars “Made in the US” in first place in German import statistics in terms of value (followed by Spain, the Czech Republic and Slovakia). President Trump can therefore be satisfied with this export success – and should not make trade more difficult.
In the USA, the German automotive industry employs around 138,000 people. Of these, 48,000 work for the automobile manufacturers and another 90,000 for German suppliers.
There is no doubt that trade and investment relations with the USA are extremely important to us – and any change in the framework conditions affects the economic situation of the industry. However, we can act with confidence given the data and facts.
Additional tariffs would directly affect the US economy – and make products more expensive for US consumers. Different tariff levels have partly developed over time and there is no rule that tariffs should be of the same amount. The legal basis for reciprocal tariffs is completely unclear.
The fact is: While the customs duty for importing cars is 10% in the EU and 2.5% in the USA, the USA charges 25% on imports of pick-up trucks, which are popular in the USA. It is wrong to describe the European sales tax as a barrier to trade, because 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. The risk of a global trade conflict with negative effects on the world economy is high. If tariffs are responded to with counter-tariffs or other measures, a spiral is set in motion that in particular also means that consumers end up having to pay more. Instead of fighting inflation, as promised, US President Donald Trump is fueling inflation in the USA.
Overall, the increasing geopolitical tensions and the increasing protectionism and activism mean that companies have to serve the markets more and more locally. This will not be without repercussions for jobs in the countries involved. The exact effects depend heavily on the respective competitive situation. But the fact is: sooner or later, isolation only knows losers!
If President Trump were to increase tariffs on cars from the EU, this would have a negative impact on exports from the EU to the USA. It would also be more expensive for consumers – all of which would cost growth and prosperity – on both sides of the Atlantic. The tariff level of 25% currently mentioned by President Trump is a provocation.
The EU should enter into dialogue with the USA while the ‘short-term reviews’ are still ongoing. In negotiations on an agreement between the EU and the USA, the various tariffs and other trade barriers could be considered bilaterally. This would take mutual interests into account.
The automotive industry would also welcome discussions about regulatory cooperation, standards and certification – this would bring benefits for both sides of the Atlantic. The EU must act in a united and strong manner – and make it clear again and again that an escalation will only produce losers.”
SOURCE: VDA
