A new 25% tariff on cars produced in the European Union for import into the United States could result in additional annual costs to the German automotive sector of €2.5 billion ($2.9 billion), according to a survey published on Saturday.
There would also be increased costs for exports to the US by German carmakers from production in other EU countries, the survey by the Center Automotive Research (CAR) found.
CAR chief Ferdinand Dudenhöffer said the new tariff, announced by President Donald Trump on Friday, was clearly directed at Germany even though it affected the EU as a whole.
“As the exports of foreign carmakers into the US are minor, the new Trump tariff threats can be interpreted as the start of an economic war targeting Germany,” he said.
Dudenhöffer noted that manufacturers were unlikely to absorb the full cost of the tariffs. “An attempt will be made to pass on part of the tariffs to customers in the US through price increases,” he said.
He noted that German carmakers benefit from strong brand loyalty, meaning buyers are unlikely to switch automatically in response to higher prices.
Dudenhöffer said the increased tariffs would have varying impact on carmakers. He noted that Mercedes and BMW operated large production sites in the US and are therefore partly shielded from the tariffs.
SUVs assembled at these plants account for a significant share of their US sales, he said.
By contrast, Porsche and Audi are more exposed, which could accelerate plans to establish assembly plants in the US, Dudenhöffer said.
Overall, the tariffs are likely to increase pressure on manufacturers to shift production away from Germany, he predicted.
Source: dpa
