* Germany’s Habeck: EU must make ‘firm response’ to tariffs
* VDA: tariffs are ‘fatal signal’ for rules-based trade
* German car shares down in pre-market trade
* Tariffs to come into effect on April 3
BERLIN, March 27 (Reuters) – Germany’s economy minister
and its autos association slammed Donald Trump’s newly-announced
25% tariff on imported vehicles to the U.S. as bad for European
and U.S. economies, calling for urgent negotiations to ward off
a spiralling trade war.
Shares in Volkswagen, the most exposed among
German carmakers to tariffs because of its large supply base in
Mexico and lack of U.S. production for its Audi and Porsche
brands, dropped 5.1% in pre-market trade.
Other autos stocks including Mercedes-Benz, BMW, and Daimler
Truck dropped around 3.5%, with autos supplier Continental
down 2.9%.
“The EU must now give a firm response to the tariffs – it
must be clear that we will not back down in the face of the
USA,” Economy Minister Robert Habeck said.
Germany’s VDA car lobby called the new levies a “fatal
signal” for free, rules-based trade, warning they would harm
companies as well as global supply chains.
“The German automotive industry is calling for immediate
negotiations between the U.S. and the EU on a bilateral
agreement,” VDA president Hildegard Mueller said in a statement.
Still, research by the IfW economic institute found that
Germany would not be the hardest-hit economy by U.S. tariffs,
the FAZ newspaper reported.
The institute estimates that German gross domestic product
will be 0.18% weaker in the first year after the introduction of
the tariffs in real terms, compared with a 1.81% hit in Mexico
and a 0.6% blow in Canada.
“Overall, the export losses are limited, as cars are often
produced close to the sales market,” IfW trade economist Julian
Hinz said in comments carried by FAZ.
(Reporting by Gdansk newsroom. Writing by Rachel More in
Berlin. Editing by Thomas Seythal and Mark Potter)
