Shares in German automakers and suppliers dropped in pre-market trading on Thursday following U.S. President Donald Trump’s announcement of a 25% tariff on imported vehicles. The move poses a significant threat to Germany’s already struggling auto industry.
Shares of BMW were down 2.3%, while Daimler Truck fell by 1.9%, according to Lang & Schwarz pre-market data. Parts supplier Continental saw a decline of 3.9%.
Germany’s VDA car lobby condemned the new tariffs, calling them a “fatal signal” for free, rules-based trade. The VDA warned that the tariffs would harm businesses and disrupt global supply chains. “The German automotive industry urges immediate negotiations between the U.S. and the EU for a bilateral agreement,” said VDA president Hildegard Mueller in a statement.
Despite the concerns, research by the IfW economic institute indicated that Germany would not face the worst impact. According to the FAZ newspaper, the institute projected that Germany’s gross domestic product would decrease by 0.18% in the first year following the tariffs, compared to a 1.81% drop in Mexico and a 0.6% decline in Canada.
“IfW trade economist Julian Hinz explained that overall export losses would be limited since many cars are produced near the sales market,” as reported by FAZ.
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