German Automakers Voice Opposition to U.S. Tariffs

Washington's unilateral tariffs on European vehicles since April have significantly undermined German automakers' profitability.

BMW's profit dropped about 29 percent and Mercedes Benz's over 50 percent in the first half of 2025, with both companies citing the tariffs as one of the primary factors.

The latest 15 percent U.S. tariff on EU vehicles fails to lift confidence among Germany's automotive giants still bruised by trade tensions.

According to the German Association of the Automotive Industry (VDA), German automakers exported nearly 450,000 vehicles to the United States in 2024 while they produced over 840,000 vehicles in the United States.

America's 50 percent import tariff on steel and aluminum has cascaded through supply chains. Oliver Blume, CEO of the Volkswagen Group said the company's factories in the U.S. face a steep increase in tariffs, adding 1.3 billion euros to Volkswagen's costs in the first half of 2025.

Hildegard Müller, president of VDA, pointed out that though tariffs declined, totaling billions of euros would impose significant pressure on the automotive industry.

Trade uncertainty has emerged as a significant business risk. Automobilwoche's journalist Frank Volk wrote that policy unpredictability could trigger worse damage than the tariffs themselves.

Michael Schumann, chairman of the Board of Directors at the German Federal Association for Economic Development and Foreign Trade, said the Chinese market could be an anchor for global enterprises.

More and more German automotive companies are paying greater attention to China, which offers a stable institutional environment and clear growth prospects.

China is not just a market, but a partner in technology.

Thomas Becker, vice president for sustainability and mobility strategy at the BMW Group, said the automaker has benefited a lot from China's advancing technologies in critical areas like high-tech, digitization, and future mobility, particularly autonomous driving.

Arno Antlitz, CFO and COO of the Volkswagen Group, expressed strong confidence in the company's localized platform development and battery partnerships in China.

The BMW Group announced a new collaboration with Chinese firm Momenta to develop intelligent driver assistance solutions tailored for the Chinese market.

The Volkswagen Group and its Chinese partners are co-developing an electrical and electronic architecture for Volkswagen-branded electric vehicles produced in China. Volkswagen's software unit CARIAD has formed a joint venture company with Horizon Robotics to develop advanced driver assistance systems and autonomous driving technologies specifically tailored for the Chinese market.

Guntram Kaiser, CEO and founder of Kaiser Communication, suggested that as China's contribution in technology, software and other fields is increasing, these achievements can be fully utilized. They can be introduced in the European and German markets.

Ferdinand Dudenh？ffer, director of the Center for Automotive Research in Germany, said China has made great strides in the automotive industry in recent years. The lithium-ion battery's home is in China and it is developing its greatest advantages in China.

Mercedes-Benz and BMW are leveraging Chinese companies' extensive battery expertise and cost advantages through scale. Collaboration between Chinese tech champions and German automakers with strong brands can become a win-win relationship.

Thorsten Giehler, director of the Economic and Social Development Department at GIZ, the German agency for international cooperation, said both Germany and China support a rules-based trade and investment system. He hoped that the two could once again work together as standard-bearers of the global rules-based system, and through bilateral cooperation jointly shape international norms and prevent the world from fracturing into isolated islands.

Source: Science and Technology Daily