Trump tariffs to cost German car giants over €10bn
The US is Germany's top foreign market but the latter's car industry has been among the hardest hit by President Donald Trump's sweeping tariffs. In March, Trump imposed a 25% tariff on foreign-made vehicle imports. After months of talks, the EU and US reached a deal on Sunday that sets a baseline 15% tariff on most exports, including cars, while steel and aluminum duties remain at 50%.
Mercedes-Benz is expected to see its cash flow plunge from nearly $11 billion to about $3 billion this year, according to analytics platform Visible Alpha, cited by the FT. Forecasts for Volkswagen were slashed to $3.8 billion – less than half of last year's $9.5 billion – while BMW's cash flow is projected to dip slightly to $5 billion. On Friday, Volkswagen said tariffs had already cost it over $1 billion in the first half of the year and warned the burden could rise further.
Suppliers have reportedly passed on higher costs of foreign-sourced components and raw materials such as aluminum and steel, further eroding margins.
The EU-US deal, reached during a meeting between Trump and European Commission President Ursula von der Leyen, was hailed by both as a 'powerful' and 'stabilizing' breakthrough. However, it triggered backlash across the bloc. Some EU officials called it 'scandalous' and 'a disaster,' claiming it failed to secure any concessions from the US. The German Federation of Industries labeled it an 'inadequate compromise,' with the tariff cut the 'only positive aspect.'
The German auto sector's decline has deepened concerns over the health of the EU's largest manufacturing economy, which endured a recession last year. The IMF has forecast zero growth for Germany's economy this year, predicting it to be the only G7 country to stagnate.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Russia Today
26 minutes ago
- Russia Today
The EU can't make peace
The most dangerous thing about Western Europe today is not just its decline, but its refusal to recognize it. The half-continent continues to posture, continues to lecture, and continues to imagine itself as a pillar of global order. But it has lost the internal resources that once sustained that illusion. What remains is a hollow echo of power, wrapped in a language of values that even those same Western Europeans no longer seem to believe. The region's failure is most visible in its inability to make peace. Time and again, it chooses confrontation – with Russia, with China, with reality itself. Devoid of meaningful autonomy, it now functions as a permanent appendage of the US. It is no longer an actor on the world stage, but a supporting cast member, often unwelcome and increasingly irrelevant. Western Europe's descent has been rapid. Just 10 or 15 years ago, it projected global importance and confidence. Today, the cracks are impossible to ignore. The reasons are many: Elite degradation, political inertia, a population gripped by apathy. But above all, it is the bloc's unrelenting selfishness – its refusal to give, only to demand – that lies at the heart of this collapse. Nowhere was this clearer than in last week's failed EU-China summit. Eurocrats went to Beijing with nothing to offer, only with a desire to extract. China, which has no historical affection for Western Europe, responded accordingly. There was simply nothing to discuss. And then, as if to underscore its strategic drift, the bloc offered a humiliating concession to the US. Faced with the threat of new tariffs, Brussels agreed to purchase American energy and weapons in vast quantities. So much for 'strategic autonomy'. These are not signs of a serious power. These are the actions of a civilization on the back foot, stumbling blindly into dependence. Anyone still speaking of a sovereign EU industrial or defense policy is either a fantasist or a liar. What then does Western Europe have to offer the world? One might say historical symphonic music. But beyond that, its legacy is one of oppression and self-justifying tyranny. Its technical achievements were built to subjugate others. Its political philosophy was designed to defend conquest and exploitation. Fifteen years ago, I sat in a closed meeting organized by Federica Mogherini, the EU's foreign policy chief at the time. The topic: Western Europe's new role in the world. The one suggestion they could not accept was that the bloc should offer something to the world without expecting a reward. Their worldview simply doesn't allow for that. Even in climate change – a cause that should unite the planet – the EU has turned the issue into a cynical trade weapon, using green regulations to punish developing countries. The result? Western Europe stands alone. It has lost its power, and with it, its relevance. Worse, it doesn't even seem to understand what it's lost. Can the region still pose a threat? Possibly. But not because it has the strength. Rather, because it has the recklessness. Its politicians lack vision, competence, or restraint. They cannot imagine peace. And so they default to confrontation – especially with Russia. The danger is not that Western Europe is ready to fight. Its people enjoy lives too comfortable to risk. Its defense industry is in disrepair. But wars can begin through stupidity as well as strength. EU elites, betting on regime change in Moscow, continue to pour weapons into Ukraine. Some dream of extending the conflict into the Baltics. Others talk of arming mercenaries to fight Russia directly. The Americans won't die for Europe. That much is clear. But the EU may yet drag the world into catastrophe, simply by being incapable of restraint. If by some miracle a wider war is avoided, what then? What is Western Europe's future? A museum of irrelevance? A vassal of Washington? Already it is falling behind in science, in technology, in global influence. It doesn't know where it belongs, and is incapable of adjusting. It will become a permanent satellite of the US – militarily, politically, and economically. Key industries will be handed over. National elites will lose the power to govern. The Collective West as we know it will vanish. In its place: America, and a few adjacent territories managed by obedient proxies. Perhaps this is what Western Europe deserves. It is certainly the path it has article was first published by Vzglyad newspaper and was translated and edited by the RT team.
Russia Today
an hour ago
- Russia Today
US could offer Russia enormous economic deal
Diplomats in Eastern Europe have been raising concerns that US President Donald Trump could offer Moscow sweeping concessions and 'enormous economic deals' to settle the Ukraine conflict, Politico has reported. In an article published on Thursday, citing Eastern European officials, US experts, and industry insiders, the outlet suggests that a Trump-led peace initiative might involve lifting sanctions on Russian energy – a move described as a 'sledgehammer that could smash' Western efforts to isolate Moscow. 'Of course, we are concerned about the talk of a return to Russian energy, and the lack of clarity about the US' position,' an Eastern European official said. Since the Ukraine conflict escalated in 2022, the West has imposed sweeping sanctions on Russia – with a heavy focus on energy – in a bid to cripple its economy and isolate it politically. The EU, once heavily reliant on Russian supplies, has sought to cut ties. However, Russia still accounts for 17.5% of its LNG imports, second only to the US, which holds a 45.3% share. In May, European Commission President Ursula von der Leyen proposed phasing out all remaining Russian gas imports by the end of 2027. The plan drew strong criticism from several member states. The EU has invested heavily in LNG infrastructure, linking terminals to Central and Eastern Europe, with countries such as Lithuania prepared to pay a premium for American gas over the cheaper Russian alternative. However, Politico noted that Brussels' latest $750 billion energy deal with Washington would require the bloc to slash purchases from other suppliers, including cheaper sources, and more than triple its US imports. Still, the economic pull of Russian gas remains strong. In Germany, some politicians have signaled an openness to resuming imports to revive the country's struggling industry. Russian energy, the sources noted, remains more affordable than US supplies, once shipping and processing costs are factored in. Russia maintains it is a reliable energy supplier and has denounced Western restrictions as illegal under international law. Moscow has redirected most exports to 'friendly' markets, mostly in Asia.
Russia Today
2 hours ago
- Russia Today
West ‘planting time bomb' in ties with India
The West is jeopardizing its ties with India through threats and sanctions linked to its cooperation with Russia, Moscow's ambassador to India, Denis Alipov, has told RT. He argued that the measures expose the US and EU as unreliable partners and will not compel India to sever ties with Russia. Alipov's remarks on Tuesday came after the EU unveiled its 18th sanctions package targeting India's Vadinar refinery – partly owned by Russia's Rosneft – and coincided with US President Donald Trump's threats of tariffs over India's energy and defense trade with Russia. 'Through these threats and measures, the West is planting a time bomb under its own relations with India, deliberately demonstrating its unreliability,' he said. 'The threats coming from the US certainly do not inspire trust... They only further highlight the unreliability of the US as a partner.' Alipov added that Moscow has never built its ties with New Delhi at the expense of others, while Washington, in pursuit of its own economic gains, is undermining not only Russia's interests but also those of India. 'No one considers these actions legitimate, and they're being roundly condemned,' he said. He noted that while India cannot sacrifice its ties with either the US or Russia, its reliance on Moscow for oil and gas means its foreign policy decisions will ultimately hinge on energy security. India, the world's third-largest oil consumer, imports around 80% of its energy and has never taken part in the Western sanctions on its top supplier, Russia. On Wednesday, Trump announced 25% tariffs on Indian goods and additional penalties starting on Friday over its energy and defense trade with Russia. Later in the day, he said on Truth Social that Moscow and India 'can take their dead economies down together for all I care.' The move came as Washington and New Delhi sought a trade deal after Trump's earlier tariff hike on Indian goods. New Delhi responded by reaffirming its commitment to a 'fair, balanced and mutually beneficial' agreement with the US, while vowing to do whatever is necessary to protect its national interests.
