Trump threatens car tariffs – consequences for German industry!

Trump threatens car tariffs – consequences for German industry!

US President Donald Trump has caused an uproar in the automotive industry with his new tariff policy. Since April 2025, increased tariffs of a whopping 25 percent have been in effect on imports of cars and car parts, a drastic increase from the previous 2.5 percent. These measures could not only shake up the US market, but also European manufacturers Stuttgart News report.

With the new tariffs, Trump is relying on a strategy aimed at encouraging foreign companies to relocate their production to the USA. The hope is to create jobs in the USA. However, there is a bit of a ray of hope for manufacturers who assemble their vehicles in the USA: They can have part of the customs duties refunded. But the question remains whether these measures will really bear fruit in the long term or whether the manufacturers will have to throw in the towel.

Consequences for the automotive industry

The warnings from industry are alarming. According to economist Thomas Puls from the German Economic Institute, the German auto industry will be particularly hit by the new tariffs. The T Online reports that 86% of medium-sized companies in Germany expect negative consequences, although a third of them could feel them immediately. That said, many American manufacturers, including the likes of General Motors, have close ties to manufacturing facilities in Mexico, which is likely to further complicate the impact.

Experts agree that tariffs could increase vehicle pricing in the United States. Sales of pick-up trucks and larger SUVs are particularly at risk, as they represent 80 percent of new registrations. When it comes to the question of how these developments will affect sales figures, there is great uncertainty. Shares of American and Asian automakers have already come under significant pressure; The expected rising costs and declines in sales are making investors nervous.

Rethink global production strategies

For many German automakers, the only solution may be to relocate production to the United States. However, this strategy requires high investments and is associated with major challenges. The Deloitte highlights that in turbulent times it is necessary to adapt global production strategies in order to remain competitive. The German automotive industry is not only challenged by the new tariffs, it also has to compete against increasing competition from China.

The forecasts about possible job losses in Germany are currently still vague, but could be significant, depending on developments. Whether German automobile companies actually decide to relocate their production facilities ultimately depends on how stable the current customs policy remains and what strategies the companies will pursue in the coming months.