**Washington**: US President Donald Trump is set to introduce additional tariffs this week, raising fears among exporters and governments worldwide. The move follows existing tariffs on cars and parts, with concerns it may trigger a trade war and impact the US economy significantly.
US President Donald Trump is poised to announce additional tariffs on imports this week, following the previously imposed 25% tariffs on cars and car parts. The expectation of further tariffs has raised significant uncertainty among governments and exporters worldwide, making it challenging to predict the specific impact or nature of these measures.
Trump has exhibited a pattern of fluctuating between announcing tariffs and pausing their implementation. This inconsistent approach has contributed to heightened volatility in global markets and has led to concerns that a trade war could precipitate another recession, either in the US or globally.
The German Association of the Automotive Industry (VDA) has voiced concerns regarding the wide-reaching implications of these tariffs. A spokesperson for the VDA, Simon Schütz, highlighted that US manufacturing heavily relies on supplier networks in neighbouring countries like Canada and Mexico, suggesting that any tariffs imposed would have significant global repercussions. “Price increases are inevitable — and for US customers in particular,” Schütz stated. He emphasised the potential long-term consequences if the situation deteriorates further, noting that it could adversely affect growth, prosperity, and potentially lead to job losses across both sides of the Atlantic.
The presence of German car manufacturers in the US market is substantial, with over 140,000 employees at American facilities and an output of more than 900,000 vehicles annually, half of which are exported. Schütz remarked, “It also needs to be emphasised that even US manufacturers themselves are against these tariffs,” pointing to a broader discontent within the US industry concerning the president’s current trade policies.
In addition to tariffs, Schütz identified other pressing challenges faced by the German automotive sector, including geopolitical shifts that continue to impact the industry. He noted that the new German government, currently in coalition negotiations, along with the EU Commission, must prioritise reducing bureaucracy and enhancing the competitiveness of their markets.
Another factor complicating the situation is the disparity in energy costs, which are reported to be three to five times higher in Europe compared to the US and China, posing a major challenge for European businesses trying to compete internationally.
Schütz insisted on the importance of European collaboration with partners facing similar challenges, advocating for global and free trade to foster prosperity. “History has shown that free trade creates winners and prosperity for all involved. That should now be our primary focus,” he concluded.
In a written statement to Euronews, Audi, a member of the Volkswagen Group, expressed a reliance on constructive dialogue between trading partners to maintain economic stability and prevent a trade conflict. The company underscored the significance of the transatlantic relationship, mentioning a recent investment of over $14 billion (€12.95 billion) in the US market, indicating a commitment to sustaining operations amidst the evolving trade landscape.
Source: Noah Wire Services
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