Shares of major German automakers declined on Monday after U.S. President Donald Trump announced a potential 30% tariff on European Union imports starting August 1, sparking investor concerns about escalating trade tensions. The announcement notably omitted any exemptions for the auto industry, which already faces a 27.5% duty under current U.S. policy.
Volkswagen (ETR:VOWG_p), BMW (ETR:BMWG), Mercedes-Benz (OTC:MBGAF), and Porsche saw their shares fall between 1.3% and 1.6% as of 0717 GMT. The auto sector, a key pillar of Germany’s export economy, is particularly vulnerable to trade disruptions, especially in the U.S. market where German vehicles enjoy strong demand but face increasing political scrutiny.
The potential tariff hike raises concerns over further strain on transatlantic trade relations and could significantly impact German manufacturers' profitability and global supply chains. Investors are now bracing for retaliatory measures from the EU, which has so far extended its pause on counter-tariffs in hopes of a negotiated solution.
Trump’s aggressive stance is part of a broader push to reshape global trade dynamics ahead of the upcoming U.S. election. However, the lack of clarity on whether the auto industry will receive any special treatment is creating additional uncertainty for one of Europe’s most valuable export sectors.
As markets react to the growing risk of a trade war escalation, analysts warn that prolonged uncertainty could weigh heavily on European equities, particularly automakers with heavy U.S. exposure. With no clear resolution in sight, German carmakers may face increased volatility in the weeks ahead.


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