The German auto trade body, the VDA, has fiercely condemned Donald Trump’s plan to impose a 25% tariff on imported heavy-duty trucks, labeling the move “incomprehensible” and economically damaging. This reaction comes as part of a broader European backlash against a new set of US tariffs that also target pharmaceuticals and kitchen cabinets.
The VDA argued that the tariffs would not only burden investment and jobs within the United States but would also weaken critical supply chains and increase costs for consumers and businesses. Highlighting the deep integration of the German auto industry with the US economy, the organization noted that its members employ more than 120,000 people in America. The announcement has already had a tangible effect, causing the stock prices of major European truck makers like Daimler Trucks and Traton Group to slide.
While the truck tariffs have captured the attention of the automotive world, the UK is primarily focused on the parallel threat of a 100% duty on branded drugs. This potential tariff has caused significant alarm in the British pharmaceutical sector, which was not protected under a recent US trade deal. The UK government is now urgently seeking a diplomatic solution.
Some market analysts believe the tariff strategy is a calculated effort to encourage domestic production in the US. The expectation is that companies with manufacturing plants on American soil will be exempt from the duties. This theory, advanced by analysts like Lale Akoner, suggests a “more bark than bite” scenario where the real targets are companies that rely exclusively on exporting to the US.
The broader implications for global trade are significant. The new tariffs threaten to escalate trade tensions and create further instability. Neil Shearing of Capital Economics noted that Mexico, which supplies 78% of US heavy truck imports, could be the most heavily affected nation, depending on whether exemptions are made for partners within the USMCA trade pact.