VDA President regarding US Tariff Package

"The extensive new reciprocal US tariffs against large parts of the world announced today by US President Donald Trump, which are to gradually take effect in the coming days, mark a fundamental turning point in trade policy. It represents the US's departure from the rules-based global trading order - and thus a departure from the foundation for global value creation and corresponding growth and prosperity in many regions of the world. This is not America first; this is America alone.

This protectionism will only produce losers. Consumers in the US will be particularly affected, as they will directly feel the effects of the additional tariffs through rising inflation and a reduced product selection. Tariffs of this kind also reduce the pressure for innovation on US companies, thus weakening their international competitiveness in the medium term. The US President's previous tariff policy has therefore met with significant criticism, even within large segments of US industry.

The announced measures also represent a massive burden and challenge for both companies and the global supply chains of the automotive industry. The consequences of the 25% tariffs, which will be imposed on passenger cars, light commercial vehicles, and certain auto parts starting April 3, are still difficult to assess. However, it is already clear that this development will have negative effects on economic growth worldwide. This will also affect jobs.

The fact is that the German automotive industry, with its more than 2,000 locations in the USA, employing around 138,000 people, is the best example of local production that has existed in the USA for decades and is deeply interwoven with the US value chain.

The EU is now called upon to act with unity and strength - while at the same time continuing to signal its willingness to negotiate. The EU can and must act confidently and put all options on the table.

The current situation also provides a basis for fundamentally necessary actions for the EU. For example, the speed and determination in concluding free trade agreements must be massively increased. Concrete results must be achieved with as many regions around the world as possible. The EU must now be an advocate for free and fair global trade. Germany's and Europe's economies need strong alliances and resilient networks.

The EU now has the opportunity to position itself as a reliable partner. We therefore expect pragmatism from the European Commission and the member states in the negotiations on free trade agreements. This also requires appropriate leadership from a new German federal government. At the same time, the US President's announcements further increase the pressure on politicians in Berlin and Brussels to do everything possible to restore Germany's international competitiveness. For the coalition negotiations, this means that extensive reforms are necessary, including those regarding energy prices, taxes and duties, and reducing bureaucracy."