President Trump’s sweeping invoices have drew a sharp reaction on Thursday from Germany, which called on the European Union to hit back with a “steady response” to measures that “will hurt the US and the EU and the world trade as a whole”.
Mr Trump announced on Wednesday that he would impose a 25 % invoice on cars and car parts sent to the United States, putting pressure on America’s leading allies around the world. The invoices, which said they were permanently, will come into force on April 3.
The United States is a critical market for Germany’s automotive industry, which transports vehicles from automakers such as BMW, Mercedes-Benz and Volkswagen to US representatives.
“It must be clear that we will not retreat,” said Robert Habeck, a German finance minister, in a statement on X. “Power and confidence are required.”
He added that Germany would support the European Commission, the European Union’s executive arm, as it negotiates with the United States to find a solution that stores a tariff spiral.
French Finance Minister Eric Lombard called on Mr Trump’s “Very bad news” and said the only alternative was for Europe to increase its own invoices to US car imports.
Mr Trump’s announcement, which will be implemented in both the finished cars and the trucks shipped to the United States and to the imported car parts, sent shares from the German automobiles falling on Thursday. The shares of the Italian luxury highway Ferrari and the Swedish manufacturer Volvo also collapsed. The route included European car spare parts manufacturers as well as Pirelli and Continental tire producers.
One of the companies facing the greatest pain is the German automaker BMW. He said in a statement on Thursday that a trade war “would not have benefits”, and called on the European Union and the United States to “immediately find a transatlantic agreement that creates growth and prevents a spiral of isolation and commercial barriers”.
The perspective of a trade war that has been exported would have widely implications. “The effects of this movement are clearly harmful and they are likely to cause further and fresh reproduced from the affected countries,” Bernstein analysts said in a note to customers.
The automakers have the option of absorbing the cost of invoices or transfer them to consumers, analysts are noted. Prices could be up to $ 12,000 per car and “resulting inflation could push Trump’s administration to support,” they wrote.
Mr Trump’s invoices are beating the European automaker at a time when it is facing transformation and increased international competition, according to a statement by the European Union of Car Manufacturers.
“European automakers have been investing in the US for decades, creating jobs, promoting economic growth in local communities and generating mass tax revenue for the US government,” said teammates Sigrid De Vries. “We call on President Trump to consider the negative impact of invoices not only on world automakers but also on US domestic production.”
Hildegard Müller, chairman of the German Lobby Group for the automotive industry, VDA, called on the invoices “a deadly trademark for free trade in trade”.
The invoices “represent a significant burden on both companies and closely intertwined global automotive supplies – with negative consequences for consumers in particular, including North America,” Ms Müller said in a statement.
“The risk of a world trade war, with negative consequences for the global economy and growth, prosperity, jobs and consumer prices, is very high,” he added.
Melissa eddy They contributed reports.
