Trump’s Massive EU Tariff Deal Eases Pressure On BMW, Mercedes originally appeared on Autoblog.
But the damage has already been done for brands like VW
In what was considered a significant win for Japanese automakers a few days ago, President Trump’s trade deal with the Eastern nation resulted in reduced tariffs on imported Japanese vehicles. The new 15% tariff is significantly lower than what it was, giving brands like Toyota and Honda an edge.
Now, Trump has reached a similar agreement with the European Union. In this latest deal, agreed upon in a meeting between Trump and European Commission President Ursula von der Leyen in Scotland, a lower 15% tariff will be imposed on most European goods, which includes new cars.
Related: Why Detroit Automakers Are Blasting U.S.’ Tariff Deal With Japan
Relief For Europe’s Auto Industry
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The new 15% tariff is down from the 25% that had been in effect since April; the latter excludes a pre-existing 2.5% levy. Certain goods will be fully exempt from tariffs, such as plane parts, specific chemicals, and semiconductor equipment, reports Al Jazeera. The EU will also be buying around $750 billion worth of semiconductors, oil, gas, and nuclear fuel in the United States. A 50% tariff on steel and aluminum still applies to the EU, though.
The new deal comes after many months of negotiations between the EU and Trump, and its timing is pertinent, too: Only days from now, Trump was set to impose a 30% tariff on EU imports.
“It was a very interesting negotiation. I think it’s going to be great for both parties,” said Trump. He also called it the “biggest deal ever made.”
Von der Leyen said the deal would “bring predictability that’s very important for our businesses on both sides of the Atlantic.”
Tough Times Still Ahead For German Automakers
Tariffs have already had a significant effect on several automakers in Germany. Although Volkswagen’s sales have increased this year, the VW Group’s profits were down by a third in the second quarter. A few days before VW reported its dismal earnings results for the first half, Porsche CEO Oliver Blume admitted Porsche is in trouble, too, and that its business model “no longer works in its current form.”
The new deal will bring some relief to brands like VW, Porsche, BMW, and Mercedes-Benz, and should help all of them keep prices of new cars somewhat under control. However, even the new tariff is expected to challenge these brands in the months ahead.
“Even a 15% tariff rate will have immense negative effects on [the] export-oriented German industry,” said Wolfgang Nierdermark from the BDI federation of industrial groups.
Trump’s Massive EU Tariff Deal Eases Pressure On BMW, Mercedes first appeared on Autoblog on Jul 28, 2025
This story was originally reported by Autoblog on Jul 28, 2025, where it first appeared.
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