ALBAWABA- German automobile exports to the United States fell by nearly 14% in the first three quarters of 2025, making the auto industry the sector most affected by President Donald Trump’s renewed trade tariffs, according to a study reviewed by Reuters on December 22.
The decline was almost double the overall 7.3% drop in German exports to the U.S., highlighting the exposure of Europe’s largest auto industry to rising trade barriers.
Under Trump’s revived “America First” trade policy, tariffs on European vehicles were initially set at 25% before being reduced to 15% under a U.S.–EU agreement reached in August 2025 to avert a wider trade conflict.
Despite the partial rollback, German carmakers including Volkswagen, BMW, and Mercedes-Benz have faced higher export costs, forcing some to shift production, raise prices, or absorb losses.
U.S. sales data show imports of German luxury vehicles fell by 12% to 15% year on year, as higher prices and growing consumer demand for domestically produced electric vehicles weighed on demand.
The current downturn mirrors the impact of tariffs imposed during Trump’s first term in 2018, when German automakers were similarly hit amid broader U.S.-China-EU trade tensions.
This time, the stakes are higher for Germany’s export-driven economy, which generates roughly €1.5 trillion annually, with the automotive sector accounting for about 20% of industrial output.
Industry groups have warned that prolonged trade restrictions could put up to 100,000 jobs at risk across automotive supply chains if exemptions or further tariff relief are not secured.
The outlook remains uncertain as Trump has threatened to impose blanket tariffs of up to 20% on European goods unless trade imbalances are reduced. The prospect has prompted calls within the EU for a coordinated response.
Ahead of renewed trade talks expected in early 2026, German Economy Minister Robert Habeck has urged companies to diversify into Asian markets to reduce reliance on the U.S. market.
