Germany Leads European Nations Response to New Trump's Auto Tariffs

Germany has stated it "will not give in" and emphasized the need for Europe to "respond firmly" as the United States moves forward with a 25% tariff on imported cars and car parts. The new tariffs, announced by President Donald Trump, have sparked strong reactions from major global economies, with France labeling the decision as "very bad news," Canada calling it a "direct attack," and China accusing the US of violating international trade rules.

The announcement has already affected financial markets, with shares of major German automakers such as Porsche, Mercedes, and BMW declining sharply, along with French firm Stellantis, which produces Jeep, Peugeot, and Fiat vehicles. Trump has warned of "far larger" tariffs should Europe collaborate with Canada in ways that he perceives as economically harmful to the US.

The new tariffs are scheduled to take effect on April 2, with taxes on businesses importing vehicles beginning the following day. Levies on car parts are set to be introduced in May or later. The US government argues that these tariffs are intended to support domestic manufacturing, with Trump stating that vehicles made in America would be exempt from the new charges.

The US imported approximately eight million cars last year, totaling around $240 billion in trade and accounting for roughly half of overall vehicle sales. Mexico remains the leading supplier of cars to the US, followed by South Korea, Japan, Canada, and Germany. Economic analysts estimate that tariffs on parts from Canada and Mexico alone could increase costs per vehicle by $4,000 to $10,000, depending on the model.

German Economy Minister Robert Habeck stressed that the European Union must "respond firmly" to the move. "It must be clear that we will not give in to the US. We need to show strength and self-confidence," Habeck stated. France has echoed this stance, with Finance Minister Eric Lombard asserting that Europe's "only solution" is to implement retaliatory tariffs on US products. Lombard emphasized the need to "rebalance the playing field" and pressure the US into negotiations.

Canadian Prime Minister Mark Carney condemned the tariffs as a "direct attack" on Canada and its automotive industry, acknowledging that while they "will hurt us," trade options are being explored. In the UK, the Society of Motor Manufacturers and Traders (SMMT) expressed disappointment, describing the tariff announcement as "unsurprising but, nevertheless, disappointing." Uniparts founder John Neill warned that the move could benefit Chinese manufacturers, as global consumers may seek alternative suppliers in response to a potential trade war.

China has accused the US of breaching World Trade Organization regulations. A foreign ministry spokesperson stated, "There are no winners in a trade war or a tariff war. No country's development and prosperity has been achieved by imposing tariffs."

Japan has also expressed concerns, warning that the tariffs will have a "significant impact" on its economic relationship with the US. A government spokesperson described the measures as "extremely regrettable" and confirmed that officials have requested an exemption from the tariffs.

In response to the evolving trade landscape, South Korean automaker Hyundai announced a $21 billion investment in the US, including the construction of a new steel plant in Louisiana. Trump praised the decision, calling it "a clear demonstration that tariffs very strongly work."

German-based Bosch, one of the world's largest auto parts suppliers, reaffirmed its confidence in the "long-term potential" of the North American market, stating that it remains committed to expanding its business in the region despite the new trade restrictions.