CAR WARS

Germany warns Trump that slapping tariffs on EU cars creates “only losers”

Obsession
"America First"
Obsession
"America First"

The German government and the country’s car industry lobby has hit back at Donald Trump’s tweet this weekend, where he threatened to slap an import tax on cars from the European Union.

“Such a trade war would leave only losers on all sides,” said Bernhard Mattes, president of Germany’s auto industry federation (VDA), adding that the auto-lobby group was “watching the current developments with great concern.”

According to the VDA, the US imported 494,000 German cars last year, while German car factories in the US produced around 800,000 cars combined, about half of which are exported, and employ around 36,500 people in the US.

Ferdinand Dudenhöffer from Germany’s Center for Automotive Research told Deutsche Welle (link in German) said that while slapping tariffs on imported cars would hurt foreign car makers, it would hurt US automakers more, as they produce a lot of cars outside the US, mainly in Mexico. General Motors imports about 700,000 cars a year, as does Fiat Chrysler.

Dudenhöffer estimated that US consumers could see the cost of a new car rise by 10% to 20% if the president were to follow through with punitive tariffs.

“In my opinion, the [American] car market would be hit hard and could even slide into recession,” he said. “And Trump can’t afford that. That’s why I think there’s a lot of hot air here.”

Steffen Seibert, spokesman for chancellor Angela Merkel, said today that a trade war would not be in German, European, or American interests. “Such measures would inflict pain on international trade flows and our industry, but above all hurt workers and consumers on both sides of the Atlantic,” Seibert said.

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