M10News — Germany has declared that it “will not give in” and insisted that Europe must “respond firmly” following Donald Trump‘s announcement of a 25% tariff on imported cars and car parts.
The US President introduced the new tariffs as part of his latest trade measures, set to take effect on April 2. Trump warned that he would impose “far larger” tariffs if Europe cooperated with Canada in what he claimed was an attempt to cause economic harm to the US.
France’s President condemned the move as “a waste of time” and “incoherent,” while Canada branded it a “direct attack.” Meanwhile, China accused Washington of breaching international trade rules.
The impact was immediate in global markets, with carmakers from Japan to Germany witnessing a sharp decline in stock prices. Shares in General Motors plunged 7%, while Ford fell over 2%.
Why Is Trump Using Tariffs?
The new tariffs are part of Trump’s strategy to protect US manufacturing, claiming that vehicles made in America will face “absolutely no tariff.”
Tariffs are taxes imposed on imported goods, often intended to shield local industries. However, they can increase costs for businesses that rely on imported parts. Companies may either absorb the costs or pass them on to consumers.
The US imported roughly 8 million cars last year, valued at approximately $240 billion, nearly half of total car sales. Mexico is the top supplier, followed by South Korea, Japan, Canada, and Germany.
Analysts at the Anderson Economic Group predict the tariffs on Canadian and Mexican car parts could increase vehicle costs by $4,000 to $10,000.
Global Backlash Grows
During a press conference, French President Emmanuel Macron criticized the tariffs, warning they would disrupt value chains, trigger inflation, and damage jobs. He urged Trump to reconsider, stating the move harmed American and European economies.
German Economy Minister Robert Habeck echoed Macron’s concerns, urging Europe to “respond firmly” and show “strength and self-confidence.”
France’s Finance Minister Eric Lombard supported this stance, emphasizing the need to retaliate with tariffs on US products to “rebalance the playing field.”
Meanwhile, Canadian Prime Minister Mark Carney condemned the tariffs as a “direct attack” on Canada’s car industry, adding that the move “will hurt us” but assured that trade strategies were being discussed.
In the UK, car industry group SMMT described the tariffs as “not surprising but disappointing.”
Uniparts founder John Neill warned that Trump’s tariffs were “a gift to the Chinese,” as global consumers might turn to Chinese-made vehicles during the trade war.
China’s foreign ministry also condemned the tariffs, stating that “there are no winners in a trade war.”
Japan and South Korea React
Japan warned the tariffs would have a “significant impact” on its trade relationship with the US. A Japanese official called the move “extremely regrettable” and confirmed that authorities had requested an exemption.
In South Korea, car giant Hyundai announced a $21 billion investment in the US just before the tariffs took effect. The plan includes a new steel plant in Louisiana. Trump welcomed the investment, claiming it proved that “tariffs work.”
Meanwhile, German-based company Bosch expressed confidence in the North American market, stating they remain committed to expanding their business there despite the escalating trade tensions.
