Chemicals, automotive and steel sectors concerned about impact of trade deal
Following the tariff agreement between the EU and the US, German industry is expressing clear disappointment. Business representatives have unanimously criticised the deal as unbalanced and disadvantaging European companies. Capital markets analysts have also voiced scepticism.
„Anyone expecting a hurricane is thankful for a storm“, says Wolfgang Große Entrup, Director General of the German Chemicals Industry Association (VCI), summing up the mood after the announcement. While escalation has been avoided, „the price is still high for both sides. Europe’s exports are losing competitiveness, while US customers are paying the tariffs.“
European Commission President Ursula von der Leyen and US President Donald Trump agreed to a baseline tariff rate of 15% on most EU imports into the US – half of what Trump had originally threatened. According to von der Leyen, this base rate also applies to cars, semiconductors, and pharmaceutical products. Aircraft and aircraft parts, certain chemicals, and selected agricultural goods will be exempt. However, steel and aluminium will still be subject to a 50% duty.
„Nothing has changed in the catastrophic situation facing the European steel industry“, comments Kerstin Maria Rippel, Managing Director of the German Steel Association.
According to the European Steel Association (Eurofer), 16% of the EU’s steel exports to non-EU countries went to the US in 2024, but by the first quarter of this year, that figure had dropped to just 12.5%.
Indirect effects
More problematic than the tariffs themselves, according to the EU steel industry, is their indirect effect: prohibitively high US duties on imports from other regions are causing global steel flows to be diverted to Europe. Already today, one in three tons of steel used in Germany is imported.
The impact on individual companies can be seen for example in the case of Audi. The 27.5% US auto tariffs introduced in the spring cost the Volkswagen subsidiary around 600 million euros in the first half of the year, CFO Jürgen Rittersberger said when presenting results in late July. The company is now stepping up its examination of of building a local production facility in the US.
Even the new tariff level, warns Hildegard Müller, President of the German Association of the Automotive Industry (VDA), „will cost German carmakers billions annually.“ Volkswagen has already revised down its full-year guidance.
