Trump’s tariff hike to boost US production deepens German automakers’ concerns

German carmakers witnessed a decline in shares on Monday after US President Donald Trump decided to raise tariffs on imported European cars to 25%, up from the previously agreed 15%. This change has significantly impacted European automobile manufacturers.

In the aftermath of the decision, the head of ANFIA a lobby representing Italy’s auto parts makers that supply German carmakers—said the industry is now better prepared to handle higher duties.

Additional tariffs would further weaken the position of Germany’s premium car manufacturers, said Matthias Schmidt. According to a study by the Center for Automotive Research, CAR chief Ferdinand Dudenhöffer noted that the new tariff announced by President Trump on Friday was clearly directed at Germany, even though it affects the EU as a whole.

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Dudenhöffer highlighted that the increased tariffs would have varying impacts on automakers. He said Mercedes-Benz and BMW operate large production facilities in the United States and are therefore partially shielded from the changes.

The report further states that Porsche and Audi are more exposed to the tariff hike and may need to accelerate plans to establish assembly plants in the US to mitigate the impact of higher duties. These new tariffs are expected to add pressure on European manufacturers to shift production away from Germany.

Previously, Germany’s automotive industry had called for an urgent de-escalation in the tariff dispute between the US and the European Union, urging immediate talks after Trump indicated potential tariff increases on the bloc.

The situation began with a social media post in which Trump said he planned to raise tariffs on cars and trucks from the EU to 25%, claiming that the bloc had failed to fully comply with a trade agreement negotiated with the United States.

Speaking to reporters at the White House, Trump reiterated his claim that the EU was “not adhering” to the agreement. He further added that the new tariffs would force automakers to “move their factory production much faster” to the United States.