US tariff move sparks criticism, concern in Germany

Berlin, Feb 3 (IANS/WISHAVWARTA) US President Donald Trump’s tariff move against Canada, Mexico and China has sparked criticism and concern in Germany.

On Saturday, Trump ordered to impose a 25 per cent tariff on imports from Mexico and Canada, and a 10 per cent tariff on Chinese goods. He also signalled that the European Union (EU) could be next, citing the bloc’s persistent trade surplus with the US.

While reaffirming Germany’s commitment to economic ties with the US, German Chancellor Olaf Scholz emphasised that the first priority should be “not to divide up the world with many tariff barriers.”

“Tariffs have never been a good idea to resolve trade policy conflicts,” Chairman of the German Christian Democratic Union Friedrich Merz said, warning of backlash in the US as rising import costs would fuel inflation and hit American consumers directly, reports Xinhua news agency.

Dirk Jandura, president of the Federation of German Wholesale, Foreign Trade and Services (BGA), described the tariffs as “a clear warning to the EU and Ursula von der Leyen,” stressing that neither Germany nor the EU should remain passive.

Trump’s move would come at a high cost for Americans, Jandura said, adding, “The losers are always end consumers, who will feel the price increase at the checkout.”

German companies are also bracing for the impact, as many supply the US market from Mexico, particularly in the automotive industry.

According to the German newspaper Handelsblatt, Mexico has been Germany’s most important investment location in Latin America for years, with total investments exceeding 45 billion US dollars since the 2000s.

Volkswagen Group, which operates one of its largest vehicle factories in Mexico, produces nearly 80 per cent of its North American vehicles in Mexico and Canada. A Volkswagen spokesman voiced concerns about the tariffs’ potential economic fallout, warning of negative effects on American consumers and the global auto industry.

According to the credit rating agency S&P, Canada and Mexico produce around 5.3 million passenger cars annually, with approximately 70 per cent destined for the US.

Importers are likely to pass most, if not all, of the price increase to consumers, S&P noted, warning that the additional costs would further strain affordability in the US auto market.