Tariffs Imposed by Trump Already Affecting Germany Intensely
The US's toughened trade policy, which has been in effect for some time, is causing severe negative impacts on German exports and various industries. According to the German Industry and Commerce Chamber (DIHK), the increased tariffs by the US on German goods are causing significant losses to the German economy.
The automotive industry, steel and aluminium sectors, and potentially pharmaceuticals are the main industries affected by the US tariffs. German exports to the US have dropped sharply, with recent data showing the lowest export levels since October 2024 due to the tariffs.
The steel and aluminium sectors have faced increased tariffs starting at 25% in March and rising to 50% by June 2025. The automotive industry faces particular risks, with companies like Volkswagen, BMW, Mercedes-Benz, Porsche, and others seeing immediate impacts. The threatened 30% tariff on autos is viewed as potentially prohibitive to transatlantic trade, aside from existing sectoral tariffs of up to 27.5% on certain vehicles.
Pharmaceutical companies are also on alert due to recent tariff threats ranging up to 200%, though the industry is awaiting concrete enforcement actions before judgment. These tariffs contribute to a broader economic impact, with the Bundesbank president warning about dampened economic growth in Germany, undermining recovery in the industrial sector.
DIHK stresses worsening trade conditions across nearly all major global markets for German businesses due to these US-imposed tariffs and ongoing uncertainty. If the uncertainty around US trade policy persists, German industry could face monthly export losses of up to one billion euros.
If the base tariff rate increases to 30% by August 1, many industries will be significantly affected. Significant sales losses or even job cuts could be inevitable in many companies. The EU and the US are currently trying to prevent further escalation in the trade conflict between the two economic powers.
Chancellor Angela Merkel's chief of staff, Helge Braun, has warned that the EU will respond with countermeasures if the US imposes higher tariffs on European cars. The ideal outcome for the German economy, as per Treier, is a comprehensive agreement that eliminates mutual tariffs in all economic areas.
Many products such as machinery, furniture, fitness equipment, and tools contain steel and aluminum and thus fall into the crosshairs of the trade policy. The base tariff rate for EU imports to the US is currently 10 percent, applied since April 9. A sectoral tariff of 25 percent has been in effect for steel and aluminum imports since March 12, and increased to 50 percent on June 4.
Volker Treier of DIHK mentions that these tariffs reach deep into industrial supply chains. The EU and the US are aiming to reach a comprehensive agreement that eliminates mutual tariffs in all economic areas, as per Treier. The DIHK calls for urgent negotiations to resolve the tariff conflict to stabilize the trade environment and avoid further economic damage.
- The ongoing US trade policy, particularly the increased tariffs on German goods, has sparked concerns in various sectors, with the employment policy of automotive industries like Volkswagen, BMW, Mercedes-Benz, Porsche, and others potentially being affected, as they face the threat of significant sales losses and potential job cuts.
- In an attempt to mitigate the economic damage caused by the US trade policy, the EU and the US are actively engaging in negotiations for a comprehensive agreement, aiming to eliminate mutual tariffs in all economic areas, including the community policy and finance sectors, to maintain a stable trade environment and economic growth.
