US tariffs hit: German car exports collapse dramatically!

US tariffs hit: German car exports collapse dramatically!

German automakers' sales to the US have seen a dramatic decline since new US import tariffs were introduced in spring 2025. How Mercury reported that exports of new cars from Germany fell by 13 percent in April and even by 25 percent in May compared to the same months last year. In total, around 64,300 vehicles were exported in these two months. The 30 percent increase in exports in March, before the tariffs took effect, shows how much recent policy decisions have affected the flow of trade.

On April 5, 2025, the US government under President Donald Trump decided on a tariff surcharge of 25 percent for car imports from the EU. In addition, tariffs on car parts have also been in effect since May 2025. The aim of these measures is to strengthen the US auto industry and promote foreign investment in the USA. According to the Association of the Automotive Industry (VDA), the USA is the most important export market for German car manufacturers.

Financial stress and industry reactions

The tariffs represent a significant financial challenge for manufacturers and their suppliers, who rely on planning security. VDA President Hildegard Müller is calling for a rapid political agreement between the EU and the USA in order to mitigate the negative effects on export statistics. In 2023, 1.39 million cars from German manufacturers were sold in the USA, with 400,000 vehicles coming from Germany alone.

The uncertainty created by Trump's tariff policies has far-reaching consequences for the economy. In addition to car manufacturers, other German companies are also affected, which influences forecasts for German economic performance. Some analysts, such as those from IfW Kiel, estimate that as a result of these developments, German exports to the USA could collapse by almost 43 percent.

Trade relations between Germany and the USA

The trade balance between Germany and the USA has been positive since the 1990s. In 2024, the US trade deficit with Germany was 69.8 billion euros. The most important exported goods are still cars and car parts. The German auto industry is particularly hard hit by tariffs, leading to lower GDP forecasts. Experts predict a decline in German GDP of 0.2 percentage points, while US tariff policy is identified as the main reason for the lowering of the GDP forecast to zero growth in 2025.

Meanwhile, negotiations between the EU and the USA continue. A deadline set by Trump for an agreement expires on July 9, 2025. The high level of uncertainty as well as rising prices and restricted trade could lead to losers on both sides of the Atlantic, which could further weigh on economic development in the long term. How Statista emphasizes, the impact of the tariff dispute remains unclear and poses risks for economic growth.