German auto groups urge swift talks to honour trade deal after Trump tariff blow
Impact of U.S.-EU Tariff Dispute on the Automotive Industry
Background of the Tariff Dispute
BERLIN, May 1 (Reuters) - The president of Germany's VDA auto association urged the U.S. and European Union to engage in swift talks and honour their existing trade agreement after President Donald Trump announced a tariff hike on cars from the EU on Friday.
VDA President Hildegard Mueller said the cost of additional tariffs would be enormous and would likely impact consumers in the United States as well.
Trump said he would increase tariffs on cars and trucks from the European Union to 25% next week, saying the bloc had not complied with its trade deal with Washington.
Challenges Facing German Carmakers
Carmakers, the largest industrial sector in Germany, are already grappling with weak demand in Europe, a shift to EVs and fierce competition from China.
Calls for Honour and Implementation of Trade Agreements
"The trade agreement concluded between the EU and the U.S. must be honored by both sides. This also means that the EU must finally implement its part of the agreements already reached last summer," Mueller said in a statement.
"The automotive industry urgently calls on both sides to de-escalate the situation and engage in swift negotiations."
Details of the Turnberry Trade Deal
The Trump administration last year imposed a 25% tariff on global automotive imports but struck a deal in Turnberry, Scotland, with the EU to lower those duties to a net 15%.
In exchange, the EU agreed to eliminate duties on U.S. industrial goods, including autos, and accept U.S. safety and emissions standards on vehicles.
Implementation Status in the EU
Although EU lawmakers advanced legislation in March to implement the tariff reductions, the process is not expected to be completed before June, as EU governments and the European Parliament negotiate final texts.
Industry Reactions and Warnings
In a separate statement, Sigrid de Vries, Director General of the European car lobby ACEA, urged European legislators to conclude negotiations as swiftly as possible.
Potential Consequences of a Trade Dispute
"The Turnberry deal provides a critical foundation for transatlantic trade stability," de Vries said in a statement. "The alternative, a return to 27.5% tariffs and an open-ended trade dispute, would be deeply damaging for Europe’s automotive manufacturers, their workers, and the broader EU economy."
Reporting Credits
(Reporting by Rachel More; writing by Matthias Williams; Editing by Rosalba O'Brien)
