German Auto Exports to US Slide 14% Amid Trade Barriers

German car exports to the United States fell nearly 14% in the first three quarters of 2025, making the automotive sector the hardest-hit segment of German industry under US President Donald Trump’s trade measures, according to a study reviewed by Reuters. The decline underscores German manufacturers’ exposure to US tariff policy and highlights pressure points for companies with large transatlantic sales volumes, including Volkswagen, Bayerische Motoren Werke and Mercedes-Benz Group.

The study found that the drop in vehicle shipments followed the introduction of higher US import duties on European-made cars. Under an agreement reached between Washington and Brussels, the United States imposed a 15% baseline tariff on cars imported from Europe starting Aug. 1. While lower than the 25% tariff initially proposed by Trump—which would have been added to an existing 2.5% levy—the measure still represents a significant increase in trade costs for exporters.

Automobiles were not the only sector affected. German engineering companies also reported weaker performance, with exports to the United States declining 9.5% in the first nine months of 2025, according to the study. Machinery exports were particularly exposed, as they are subject to a 50% US tariff on steel and aluminum products used in manufacturing.

Across all sectors, German exports to the United States fell 7.8% year on year in the first three quarters of 2025. This contrasts with average growth of nearly 5% recorded over the same period from 2016 through 2024, marking a sharp reversal in trade momentum.

Industry data cited in the study showed that the automotive sector’s contraction was steeper than that of other major exporting industries, reflecting its reliance on the US market and sensitivity to tariff changes. German manufacturers ship hundreds of thousands of vehicles annually to US ports, including through hubs such as Emden, where cars produced by the Volkswagen Group are staged for export.

Germany’s car industry recorded its weakest quarter since the aftermath of the 2009 financial crisis, delivering the poorest performance among major carmaking countries in 2025, according to a separate study by EY Consulting. The report points to a convergence of pressures, describing a “perfect storm” of high energy costs, slowing technological progress and intensified competition from Chinese manufacturers, compounded by the impact of tariffs.

These factors have pushed Germany’s largest industrial groups to take unprecedented steps, including factory closures and large-scale jobs cuts. Volkswagen plans to eliminate 35,000 jobs in Germany by 2030 and narrowly avoided its first domestic plant closures through a December 2024 agreement with IG Metall that reduced capacity by about 700,000 vehicles. Mercedes-Benz is preparing to cut up to 16,600 jobs worldwide under a €5 billion (US$5.4 billion) cost-saving program, relying on voluntary redundancies while extending job security in Germany to 2034.

Suppliers have been hit even harder. ZF Friedrichshafen plans to cut up to 14,000 jobs this decade, Bosch is eliminating more than 1,100 positions at one German site and thousands globally, and Continental is cutting 7,150 roles. Audi has also announced plans to eliminate 7,500 jobs in Germany by 2029, mainly in development and administrative functions.