Germany has declared that it will not back down after U.S. President Donald Trump announced a 25% tariff on imported cars and car parts.
European leaders have called for a strong response, with France labeling the move “very bad news” and Canada describing it as a “direct attack.” China has also accused the U.S. of violating global trade rules.
The announcement sent shockwaves through financial markets, with shares in major German automakers Porsche, Mercedes, and BMW falling sharply. French car manufacturer Stellantis, which owns Jeep, Peugeot, and Fiat, also saw its stock drop.
Trump warned that even higher tariffs could follow if Europe collaborates with Canada on trade policies he claims are damaging to the U.S. The new tariffs, set to take effect on April 2, will immediately apply to imported vehicles, while taxes on auto parts are expected to be implemented in May or later. Trump argues that these measures will boost domestic manufacturing, stating that cars made in the U.S. will be exempt.
Germany’s Economy Minister Robert Habeck insisted that the European Union must respond with strength and confidence, making it clear that Europe will not accept these tariffs without a fight. France echoed this stance, with Finance Minister Eric Lombard calling for retaliatory tariffs on U.S. goods, saying Europe must not allow itself to be targeted without consequences.
Canadian Prime Minister Mark Carney expressed concern about the economic impact on Canada’s auto industry and said his government is exploring possible responses. Meanwhile, China’s foreign ministry warned that trade wars have no winners and accused the U.S. of breaching World Trade Organization regulations.
Japan also raised alarms about the potential damage to its economic ties with the U.S., calling the tariffs “extremely regrettable” and requesting an exemption. In contrast, South Korean automaker Hyundai announced a $21 billion investment in the U.S., including plans for a new steel plant in Louisiana. Trump praised the move as proof that tariffs work.
Despite the turmoil, German-based Bosch expressed confidence in the North American market and reaffirmed its commitment to expanding its business there. However, analysts warn that the tariffs could drive up vehicle costs by $4,000 to $10,000, depending on the model, and further strain global trade relations.