German auto industry significantly affected by US tariffs – study

The German automotive industry has become one of the country’s hardest-hit industries due to US tariffs. This is stated in a new expert report by the Cologne Institute for Economic Research.

In the first three quarters of 2025, German automotive exports to the United States fell by almost 14% year-on-year. Under an agreement between Washington and Brussels, the US imposed a base tariff of 15% on cars from Europe on August 1. This rate is significantly lower than the initial 25% rate, in addition to the existing 2.5% duty.

At the same time, exports of German engineering products to the US market fell by 9.5% year-on-year in the first nine months of this year, as they are subject to a 50% tariff on steel, aluminum, and related products. The same decline (9.5% year-on-year) was observed in the chemical industry, although researchers cannot explain this solely by the effect of tariffs.

“Other factors probably played a role in the case of chemical products, such as a decline in production in Germany due to higher energy prices,” the report says.

On average, German exports to the US in all sectors fell by 7.8% year-on-year in January-September, following average growth of almost 5% in the same periods from 2016 to 2024.

As noted by the author of the study, Samina Sultan, it should now be assumed that US tariffs will not return to the level that existed before the Trump administration. Therefore, a significant recovery of German exports to this market is unlikely in the near future, and developments in the third quarter may represent the “new normal.”

Earlier, it was reported that EU governments want to add safeguards and a review clause to the bloc’s tariff agreement with the US. In this way, the bloc’s members seek to counter fears that a possible surge in American imports could harm European industry.