Donald Trump has kept the world aside in his second term as an US President. Tatifs are just one part of their agenda, but alone alone the market turmoil has triggered the upheaval and threatens the very foundation of global trade.
Export settings such as Germany-and especially are feeling their motor vehicle industry.
According to data compilation by Destatis, the German Statistics Office, around 3.4 million passenger vehicles were exported from Germany in 2024, the United States’s largest single market.
The President of the German IFO Economic Think Tank, Clemens Fut, told Reuters why it was that the American wild affects the high -levy “German’s most important exports good” on the automobile imports.
“This is an important burden on the German economy alone,” he said.
Many European auto manufacturers, including German’s Mercedes, have been suspended or cut under financial guidance of the whole year, partially characterize Trump’s move for business tawries.
“Current trade policies believe, [earnings before interest and taxes] The company said in a statement, “The free cash flow of the industrial business, as well as the adjusted returns on the sale of Mercedes-Benz cars and Mercedes-Benz vans will be negatively affected.
Stockpiling cars
An unusual trend has come to light in the global auto industry as Donald Trump has unveiled its plans to tariff imported cars: more vehicles are produced and sent to the US than before.
For Ferdinand Dudenhofer, director of the Center Automotive Research (CAR) in Bochaum, Germany, car manufacturers have resorted to the strategy of “stockpiling exports” to defeat high duties for at least a few months.
He “restored his inventions in the US,” he explained to DW, as part of efforts to import more vehicles, resulting in “short-term counter-cycle production growth”.
Stephen Brazel, director of the German-based Automotive Management (CAM), shared the scene, and said that German car manufacturers had “sent many vehicles as possible in America”.
“Finally, prices will rise. The demand in the US will fall as a result, and therefore will be revenue and profit,” he told DW.
Hope out of London
Politicians and economists are most afraid that Trump’s business policies are unpredictable.
However, the US President has shown a degree of flexibility in his efforts to attack trade deals. The most recent examples have been provisional agreements with the UK and China in which they have reduced tariffs for some periods.
The UK government in London has reduced tariffs on 100,000 British cars by 10% – roughly the number of vehicles exported by the UK to the US last year. Any vehicle beyond that quota will be subject to 27.5% import duty.
As it could, Trump, therefore promised that the engine and aircraft parts of the UK aerospace manufacturer Rolls-Royce can be exported to US duty-free. But, as the BBC reported, that part of the deal is finally away as it would require approval by the US Congress, which is a saying in deciding the long -term American trade agreements.
Poison for business
Trump’s irregular trade and economic policies are difficult to face, obtaining experts interviewed by DW.
“Flexibility is important,” when encountered with Trump’s policies, Bratzel said, however, would be constant uncertainty “for the manufacturers and suppliers that require long -term and complex supply chains that require.”
Dear veins of the Kail Institute for the World Economy (IFW) in Germany see uncertainty as a major issue for European car manufacturers, who are struggling with other challenges. High production costs and “lack of attractive models, specificly in the field of electrical dynamics, told DW,” damaged competition against Chinese rivals “.
To avoid high torfs in the long run, some German car manufacturers are considering moving production for the US, Dohse said, and mental premium car manufacturer Audi as an example, as an “discovery of” the idea of building a plant. “Further, a joint Audi-Poire Plan in the US can be an option,” he said.
Global labor risk
But investing in the US is not a silver pill because car production still requires imported parts in the US, and it also goes to American companies. Many components in “American” cars are sour from abroad, which experts desire the concept of global industrial “laboratory division”, not understood by the Trump administration.
“Trump does not really understand the benefits of the concept or international division of labor,” Brazel said, Trump’s so -called America’s first agenda may do “severe damage” in the end.
US car manufacturer Ford Motor suspended its annual guidance earlier this month as due to uncertainty around Trump’s tariff. It said that Levi spent about $ 1.5 billion (€ 1.3 billion) to the company in the earnings adjusted before interest and taxes.
Ford CEO Jim Farley told the analyst, “This is still to fully understand the reactions of rivals to our rivals to the thesis.” “However, it is clear that in this new environment, vehicle manufacturers with the largest American footprints will have a major advantage.”
Search for new markets
Given the upheaval caused by Trump’s trade policy, German car manufacturers need new strategies.
Dudenhöffer recommends restraint, “Wait and see” choosing for the approach that “doesn’t react yet.” Because the situation is more uncertain than ever, he suggested focusing on future investment in Asia instead.
“The most important result is more geographical diversification of production,” Dohse echoed. “Companies should expand their manufacturing in more countries to be less dependent on the trade rules of a one nation.”
Bratzel cited the principle of “Build Whire Whre You Sale” – meaning in markets where vehicles are sold. He said that the trend is already running, “maximum value creation is being transferred to the area where vehicles are marked.”
This article was original in German.
