A trade storm is brewing across the Atlantic as Germany warns that the European Union stands ready to retaliate if the United States follows through on a threatened 25% tariff on European automobiles.
German Vice‑Chancellor and Finance Minister Lars Klingbeil told reporters in Berlin that the EU expects Washington to honor a previously agreed tariff deal and called for a joint solution rather than escalation. "We are prepared if an escalation were to occur," he said, underscoring Berlin’s resolve while keeping the door open for dialogue.
The warning came after US President Donald Trump posted on social media that Washington would impose the higher tariff this week, accusing the bloc of failing to comply with a bilateral trade agreement. Under the proposed policy, US‑made vehicles would be exempted, while all EU‑produced cars would face the steep new rate.
German economists are already sounding alarm bells. The Kiel Institute for the World Economy estimates that a 25% tariff could shave roughly 0.3% off Germany’s real economic output, a blow to an export‑driven automotive sector that ships a sizable share of its production to the United States.
EU officials have reaffirmed the bloc’s willingness to adopt proportionate countermeasures to protect its economic interests. Policymakers in Berlin and Brussels are reportedly drafting a list of US goods that could be targeted with retaliatory tariffs if Washington proceeds.
For Asian economies, the dispute carries a cautionary note. The continent’s manufacturers supply key components to both European and US carmakers, and any sustained trade conflict could ripple through supply chains that stretch from Shanghai to Stuttgart. Business professionals, investors, and even travelers who keep an eye on global market trends are watching closely.
Despite the rising tensions, German officials stress the importance of negotiation, hoping that diplomatic channels can defuse the standoff before it spirals into a broader transatlantic trade war.
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Germany warns EU will retaliate if US raises auto tariffs to 25%
cgtn.com
