Germany: Car Industry Warns Trump Customs Will Hurt World Market · Global Voices

The US President’s plans for the imposition of tariffs will mean higher car prices for American consumers and will harm world consumers, as the German car industry has warned today, with the shares of companies retreating due to the prospects for higher tariffs. Hildegard Miller, president of the German VDA car union, said at an annual press conference that the tariffs Trump threatens will lead to an increase in inflation in the US. “Donald Trump promised his campaign to reduce inflation,” he said. “In this sense, we hope for further discussions on this issue”. Trump did not directly implement a series of duties he had announced, but said they continue to be an option and implied that duties of 25% in Canada and Mexico may be imposed perhaps on February 1st. In the past, Trump has used the tariff threat to force car companies to transfer more of their production to the US. Global car manufacturers manufacture cars for sale in the US and the Central American country is an integral part of the supply chain for American vehicle production. Large suppliers, such as Bosch and Continental, are working on ways to carry part of the production and ease the impact, but American tariffs on car imports from Mexico could also affect their car manufacturers and suppliers in the US, Europe, Japan and South Korea. In Asia, the continuing threat of American tariffs hit the shares of Honda, Mazda, Hyundai and Kia, all of which produce vehicles in Mexico. CORVERSE In Europe, the shares of Volkswagen and Stellantis, which may be particularly vulnerable to production duties in Mexico, recorded a drop of 0.8% and 1.3% respectively. Volkswagen, the world’s second largest car industry, said it “is concerned about the harmful economic impact that the proposed duties by the US government will have on American consumers and the international car industry.” Car companies have started negotiations with Trump’s group prior to the inauguration of the new president, in hopes of preventing the imposition of tariffs. Stellantis president John Elkan spent four days in Washington in meetings with Trump and his high-ranking officials, according to a company source. Elkan, currently at the helm of Chrysler and her mother Jeep, Stellantis, while the search process for a new CEO is under way, was among the global officials attending the celebrations for Trump’s inauguration yesterday. Volkswagen is also in close contact with Trump’s government about tariffs, declared two persons with knowledge of the matter. Volkswagen and German competitors of Mercedes-Benz and BMW have factories in Republican states that voted for Trump and have all stressed their commitment to American production. VDA Miller said this should be taken into account in any tariff talks. “We have much to offer, many jobs in the US, an operating production network that also creates growth and prosperity in the US,” he said. “If duties are imposed, we need to consider how we can respond to them in a tangible way”. Source: RES – ICM