Agency: Trump Plans to Raise Auto Tariffs, Could Cost Germany Nearly $18 Billion

On May 2, an economic agency analyzed that U.S. President Donald Trump’s announcement to impose tariffs on EU cars and trucks could lead to a loss of nearly 15 billion euros (approximately $17.58 billion) in German output. The Kiel Institute for the World Economy (IfW) highlighted this estimate, underscoring the vulnerability of the EU’s largest economy to U.S. import tariffs—such tariffs have already inflicted billions of euros in losses on the German automotive industry. The institute’s analysis stated, “The impact will be significant,” projecting that the output loss could rise to about 30 billion euros in the long term. Moritz Schularick, president of the Kiel Institute, noted that Trump announced on Friday that he would raise the EU auto tariff from the previously agreed 15% to 25% next week, citing the EU’s failure to comply with a trade agreement made with Washington. IfW economist Julian Schmitz remarked, “Germany’s already sluggish economic growth will be severely impacted.” The institute currently predicts that the German economy will grow by 0.8% this year. It added that other major European economies with significant automotive industries, such as Italy, Slovakia, and Sweden, could also suffer substantial losses. Jens Sudekum, chief advisor to the German Minister of Economy, suggested caution regarding Trump’s actions. Sudekum stated, “The EU should simply wait and see. It is well-known that Trump often rescinds or retracts his high-profile tariff threats.” He pointed out that Trump must clarify why he believes the EU has not complied with existing trade agreements, and it remains unclear whether the latest tariff threat has a legal basis. The advisor commented, “Everything seems quite impulsive.” (Dongxin News Agency)