Trump Plans to Raise EU Auto Tariffs, Threatening Germany with Nearly $18 Billion in Output Losses

U.S. President Donald Trump announced plans to raise import tariffs on European Union cars and trucks from 15% to 25%, citing the EU's failure to uphold trade agreements reached with the United States. According to an analysis by the Kiel Institute for the World Economy, this move could result in output losses of approximately €15 billion (about $17.58 billion) for Germany, with potential long-term losses rising to around €30 billion. The institute noted that Germany, as the EU’s largest economy, is highly sensitive to U.S. tariff policies, and its automotive sector has already suffered billions of euros in losses due to previous tariff measures. Julian Hinz, an economist at the institute, stated that Germany’s already sluggish economic growth would face a severe blow, with current projections estimating only 0.8% GDP growth for 2024. Additionally, other European countries with significant automotive manufacturing sectors—such as Italy, Slovakia, and Sweden—could also incur substantial economic losses. Jens Südekum, chief economic advisor to Germany’s Minister for Economic Affairs, recommended that the EU refrain from immediate retaliatory measures, noting that Trump has often withdrawn high-profile tariff threats in the past and questioning both the legal basis and rationale behind the latest move.