Germany stated it would not compromise and Europe must “respond firmly” as US President Donald Trump imposes a 25% tax on imported cars and car parts in his latest tariffs. Other major world economies also vowed to retaliate, with France calling it “very bad news,” Canada viewing it as a “direct attack,” and China accusing Washington of violating international trade rules. Shares in Porsche, Mercedes, BMW, and Stellantis dropped sharply in Frankfurt after the announcement. The fresh car tariffs will take effect on April 2, followed by charges on businesses importing vehicles. Taxes on parts are set to begin in May or later. Trump argues that the tariffs are intended to support US manufacturing and emphasizes that if cars are made in America, there will be “absolutely no tariff.” While tariffs can protect domestic businesses, they may also raise costs for businesses that rely on parts from abroad. The US imported around eight million cars last year, accounting for approximately $240 billion in trade and roughly half of overall sales. Analysts estimate that tariffs on parts from Canada and Mexico alone could lead to costs increasing by $4,000-$10,000, depending on the vehicle. German Economy Minister Robert Habeck stated that the European Union must “respond firmly” and demonstrate strength and self-confidence. France, too, supports a unified approach, with Finance Minister Eric Lombard stating that Europe’s only solution is to retaliate with tariffs on US products. Canadian Prime Minister Mark Carney called the tariffs a “direct attack” on his country and its car industry. China accused the US of violating World Trade Organization rules and emphasized that there are no winners in trade wars or tariff wars. Japan expressed concern regarding the significant impact on its economic relationship with the US and has requested an exemption. In response to the latest levy, Hyundai announced a $21 billion investment in the US, including the construction of a new steel plant in Louisiana. Trump praised the investment as proof that tariffs “very strongly work.” Bosch, a German-based company, expressed its-confidence in the long-term potential of the North American market and plans to continue expanding its business there.

Source: https://www.bbc.com/news/articles/cy4vjwzv22eo