Tariff deal will result in ‘considerable negative repercussions', German industry warns
German
politicians and business leaders hoped having one of their own heading the
European Commission
would be a good thing. Last weekend's trade agreement between
Ursula von der Leyen
and
Donald Trump
put an end to that.
'Von der Leyen has not delivered a deal, rather the surrender of our companies,' said Christoph Ahlhaus, head of the German and European Mittelstand (SME) representative associations. 'We need someone at the head of Europe who fights for our interests. If the commission president is not able to do this then [Chancellor Friedrich]
Merz
must draw the consequences.'
Like Ireland, Germany has huge trade exposure to the US, selling goods worth €161 billion stateside last year. And Germany's US trade surplus of nearly €70 billion makes up a huge part of the EU surplus targeted by the Trump
tariff threats
.
Chancellor Merz
, leader of Ms von der Leyen's political home, the centre-right Christian Democratic Union (CDU), has tried to cool tempers. The proposed 15 per cent tariff deal was along the lines he expected, Merz said, but would still cause 'significant damage' to the German economy – in its third year of recession.
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Mr Merz promised Ms von der Leyen his 'full support' for Brussels in 'the negotiations that will now begin'. But that could change – if the hail of abuse from German industry continues.
Mr Ahlhaus said Ms von der Leyen was trying to talk up a 'capitulation' that will cause a 'tsunami' of SME insolvencies across Europe.
Germany's influential BDI industry federation warned the deal as presented would have 'considerable negative repercussions' and sent 'a fatal signal'.
Similarly Germany's chemical trade association VCI said the accord 'avoided an escalation' but left rates 'too high', though it acknowledged: 'When one expects a hurricane, you rejoice at a simple storm.'
Germany's BGA exporter federation called the deal a 'painful compromise' bringing an 'existential threat' for many member companies.
Senior economists agree, with IFO institute president Clemens Faust calling the deal a 'humiliation for the EU that reflects the imbalance in power'.
Through gritted teeth, German Automotive Association president Hildegard Müller said the deal was 'fundamentally good' but would 'cost the German automotive industry billions annually'.
German car companies have seen their shares fall on news of the deal. They have given up on Brussels and are reportedly beginning their own direct trade talks with Washington. Already in 2025, a separate 50 per cent tariff on US imports of steel and aluminium have cost the
VW
group alone €1.3 billion.
All automotive firms hope to strike 'scalable' tariff deals with the Trump administration, with import costs dropping for every dollar invested in US production.
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