VDA President Hildegard Müller Regarding US Tariff Reductions

"The US government is fundamentally sending the right signal by taking a small step toward easing the burden on the automotive industry. However, the measures fall far short of what is needed and only reduce the imposed tariffs very slightly. The proposed relief for certain auto parts for vehicles manufactured in the US is also intended to be limited to two years. Furthermore, various legal and practical questions remain open for the time being.

On the positive side, there will be exceptions to the current multiple calculation of tariffs. For example, tariffs on automobile imports from Mexico and Canada, or on steel and aluminum, will not be added to the 25 percent tariffs on cars, light commercial vehicles, and certain car parts. Nevertheless, the additional burden remains enormous. Therefore, the attempt to reach a political agreement that will permanently eliminate the additional 25 percent tariffs on vehicles and components remains crucial. Even with the new announcements, German manufacturers shipping from Europe to the USA will still have to pay a total of 27.5 percent in tariffs on cars.

The fact is: Companies urgently need more clarity to assess the precise impacts and implement the measures with legal certainty. Given the highly interwoven automotive supply chains globally, and especially in North America, the additional tariffs on certain components, which are scheduled to take effect on May 3, continue to pose significant challenges and burdens for manufacturers and suppliers on both sides of the Atlantic. The bureaucratic burden for companies and authorities will also be enormous.

Fundamentally, Germany and the EU must now be strong advocates for free and fair global trade. It is essential to conclude free trade agreements with additional regions as quickly and decisively as possible. Furthermore, the EU must actively seek dialogue with the US to revoke tariffs."