Germany auto association VDA says on US tariffs: We expect swift and constructive talks between the US and the EU to prevent further escalation and provide urgent clarity

Germany auto association VDA says on US tariffs: We expect swift and constructive talks between the US and the EU to prevent further escalation and provide urgent clarity

VDA Calls for Urgent EU-US Dialogue to Address Automotive Tariff Uncertainty

The German automotive industry association VDA has emphasized the need for swift and constructive negotiations between the EU and the U.S. to resolve ongoing tariff disputes and provide clarity for businesses. The association highlighted that while the July 2025 EU-US agreement to reduce automotive tariffs from 27.5% to 15% represents progress, implementation delays and conditionalities remain a significant challenge.

Under the framework agreement, the U.S. will lower tariffs on passenger vehicles and parts to 15%, contingent on the EU reciprocating with tariff cuts on U.S. imports. The VDA noted that retroactive application of these reduced rates for August 2025 is possible if the EU acts swiftly, but uncertainty persists about the timeline for implementation. This ambiguity has left European automakers, including major German exporters like Volkswagen and BMW, in a planning limbo, with Hildegard Müller, VDA president, stressing that "companies urgently need clarity and planning security" according to industry analysis.

The VDA also underscored the broader economic risks of prolonged trade tensions. The automotive sector's transatlantic supply chains, which involve over 2,000 European locations in the U.S., are particularly vulnerable to tariff escalations. Müller reiterated that the EU must prioritize regulatory cooperation and mutual recognition of standards to strengthen competitiveness, while also addressing internal challenges such as improving locational attractiveness for investment.

Recent threats by U.S. President Donald Trump to impose additional tariffs—up to 25% on vehicles and 10-25% on parts—have intensified concerns. The VDA joined industry leaders in calling for a coordinated EU response to avoid retaliatory measures that could further destabilize trade. However, Müller cautioned that "the EU must resolutely tackle its own homework" to remain competitive globally, including accelerating free trade agreements and raw materials partnerships.

As the EU prepares for an emergency summit to address Trump's latest demands, the VDA's stance reflects a dual focus: advocating for pragmatic dialogue to avert a trade war while urging structural reforms to bolster European industry resilience.