The German auto industry will soon feel the effects of the punitive tariffs raised by Donald Trump. The United States imposes 25 percent tariffs on imports from neighboring Mexico and Canada, only 10 percent on energy imports from Canada. An additional 10 percent are also due on all imports from China. And the EU could be the next: “absolutely”, the president recently said when asked whether he would also raise tariffs on products from the EU.
The tariffs against Canada, China and Mexico have an impact on Europe, especially the latter. The large German car manufacturers and many suppliers use Mexico as a cheap production site-and from there serve the US market. VW, Audi and BMW have their own factories in the country, Mercedes-Benz produced in a community work with Nissan.
Puncture tariffs also affect Europe
Dirk Jandura, President of the German Foreign Trade Association BGA, already sees a clear sign of the EU and Commission President Ursula von der Leyen in the new US tariffs. “We must not wait until the EU or Germany is also documented with tariffs,” warns Jandura in a reaction to the US tariffs.
The German Chancellor sounds more confident. When asked about possible European countermeasures, Olaf Scholz said that the EU was a strong economic area and had “its own options for action”. Building on this strength, one wants to continue economic relations with the United States. But first of all, it is about “we do not divide the world through many duty barriers”.
German carmaker affected
A Volkswagen spokesman is only careful on the day after the customs announcement: “As a globally operating automobile manufacturer, we observe the developments in the USA very precisely and evaluate any effects on the automotive industry and our company, which is based on the announced tariffs for imports Canada and Mexico to the United States are possible, “said the dpa news agency.
The group promotes open markets and stable trade relationships, because they are essential for a competitive economy and especially for the automotive industry. And the hope dies last: “We rely on constructive discussions between the trading partners to ensure planning security and economic stability and to avoid a trade conflict,” said the VW spokesman.
Industry expert Stefan Hecht from the management consultancy Advyce & Company continues significantly. He expects the manufacturers to move at least part of the production of Mexico to the USA, where VW, BMW and Mercedes also have works. The three manufacturers did not first comment on this.
The VW spokesman initially said nothing about the VW plans of a new battery cell factory in Ontario, Canada. The factory is intended to supply the Group’s e-car works in the United States.
In the end, the consumer pays
Foreign trade expert Jandura sees the people in the United States as a loser of the customs policy of her president: “Trump’s decision will be expensive for the Americans, tariffs always work on both sides.” Countermeasures by the affected countries would exacerbate a “trade conflict between the nations”, he warned. “The losers are always the end consumers who feel the price increases at the cash register. I would like the tariffs to be averted.”
Anyone who ultimately arises for the tariffs depends on the delivery contracts between buyers and the seller. As a rule, it is the importers who pass on higher costs to consumers. An example: When cars like in the USA depend on deliveries from Mexico and Canada and tariffs are charged on these parts, the cars become more expensive.
Affected countries defend themselves against Donald Trump
The same night, in which Trump announced the tariffs, Canada, Mexico and China announced countermeasures. From Tuesday, Canada plans to raise counter-tariffs of 25 percent on US goods. Mexico and China also announced “corresponding countermeasures”. China also wants to submit a lawsuit to the World Trade Organization (WTO).
Whether the country is right is open: the 166 WTO member countries have committed themselves to fair trade and reducing trade barriers such as tariffs. Under certain conditions, tariffs WTO-compliant can only be raised via the level promised when they join. One argument would be that otherwise national security is at risk.