Pavel MayerA lot of panic about US-tariffs on cars in Germany, but I think it won't be that bad. Trump aims at three things: In the short term, he wants to "soften up" Europe for some kind of "negotiations" while raking in a bit of money, and in the long term he wants manufacturing to "come back" and replace income tax with tariffs. However, it is very unlikely things will go his way, for a number of reasons I will explain:
First of all, even cars made in the U.S. by U.S. companies like Ford and GM, 60% of the parts are imported, and they also produce 25-45% of their cars entirely in Canada and Mexico. Imports fro Europe are about 25% of the U.S. car market, with almost 2/3 from Germany. So what is going to happen with these 25% tariffs? There is a high likelihood these tariffs won't last, as they will drive up the costs of all cars in the U.S., not only the imported cars.
German car manufacturers also produce about 2/3 of the cars they sell in the US in the US, notably the BMW-Plant Spartanburg, South Carolina, Mercedes-Benz U.S. International (MBUSI) in Tuscaloosa, Alabama, and the VW Chattanooga Assembly Plant, Tennessee, producing in the order of 1 Mio. cars per year, and some of them for export, which poses a bigger problem than the U.S.-market, possibly even increasing the U.S. trade deficit.
The U.S. domestic car market crazy since Covid, with high prices, and in most areas of the USA you can't live without a car. No shops, workplaces and medical facilities you can reach without a car, so the US needs about 17 Mio. new cars every year, and somebody has to build them, and the US can't do it domestically, and building up production capacity in the US would take a decade and a lot of investment, which is unlikely to manifest anytime soon, so I do not expect much to change.