Germany warned that trade wars hurt “both sides,” ahead of US President Donald Trump’s expected announcement of sweeping new tariffs.
“The costs of a trade war do not fall on one side but can become expensive for both sides,” government spokesman Steffen Hebestreit said.
He added, however, that Berlin was “ready and willing to negotiate at the European level with the United States” to avoid such a dispute.
US tariffs on European goods could have a massive impact on the German economy, according to the Munich-based ifo Institute.
If the United States were to announce reciprocal tariffs (raising duties o match those imposed on U.S. exports by trading partners) German exports would fall by 2.4%, a report by the institute showed.
Italy’s Meloni says US tariffs would hurt Italian producers
The introduction of new US tariffs would hit Italian producers hard, Prime Minister Giorgia Meloni said.
“It is clear that the introduction of new tariffs would have heavy repercussions for Italian producers,” Meloni said at a prize-giving ceremony for Italian cuisine in Rome, adding that every effort should be made to avoid a trade war.
Meloni has a friendly relationship with Trump and has been more cautious than other EU leaders on how the bloc should respond to the tariffs. Still, she said she did not rule out “adequate responses” to defend Italian products.
Separately, Italian EU Affairs Minister Tommaso Foti warned against a tit-for-tat approach from Italy and Europe.
“It must not be a gut reaction, but a reasoned one. There is a need for dialogue… the less we raise our voice the better, the point is to be determined when we are at the (negotiating) table,” he said.
UK’s Starmer pledges ‘calm’ response to US tariffs but rules nothing out
British Prime Minister Keir Starmer said his government has “prepared for all eventualities” and is working with companies that could be affected by US President Donald Trump’s tariffs.
At Prime Minister’s Questions, Starmer told members of parliament: “Let me be clear with the House [of Commons], a trade war is in nobody’s interests and the country deserves — and we will take — a calm, pragmatic approach.”
He said constructive talks were progressing to agree on a broader economic prosperity deal with the US. He also said the UK government was working with all industries and sectors likely to be affected by the tariffs.
“Our decisions will always be guided by our national interest, and that’s why we have prepared for all eventualities, and we will rule nothing out,” Starmer added.
According to economists, the imposition of tariffs could reduce the size of the UK economy by as much as 1% if there is a full-blown trade war and the UK retaliates against Trump’s actions.
German automakers report surge in US sales ahead of expected tariffs
German carmakers Volkswagen and BMW have reported booming sales in the United States, just hours before US President Donald Trump is expected to announce a massive round of tariffs on EU goods.
Volkswagen said its first-quarter sales rose 7.1% to 87,915 vehicles, driven by strong performances from the Taos, Jetta and ID.4 models.
At the same time, Volkswagen subsidiary Audi reported a 3% drop in sales compared to the first quarter of 2024, although March sales were up 8%.
BMW sold 87,615 vehicles under its core BMW brand in the first quarter, an increase of 3.7% compared to the same period last year. Sales of its electric vehicles were also impressive, up more than 25%.
The results suggest that long-threatened tariffs on imports from the EU may have led to preemptive purchases by US consumers.
The United States currently imposes a 2.5% tariff on passenger cars from the EU, with a 25% levy on pickup trucks and heavy vehicles. Trump has announced additional tariffs of 25% on cars from the EU.
What have German leaders said about a trade war with the US?
Donald Trump’s tariff plans have drawn a critical response from German leaders, as the new US tariffs on cars are likely to hit the German auto industry hard.
Germany’s outgoing Chancellor Olaf Scholz said that Donald Trump’s decision to impose tariffs on cars was wrong. “The US has chosen a path at whose end lie only losers, since tariffs and isolation hurt prosperity for everyone,” he added.
Economy Minister Robert Habeck has urged European leaders not to cave in to Trump. “It is now important for the EU to give a firm response to the tariffs — it must be clear that we will not back down in the face of the US. Strength and self-confidence are what is needed,” Habeck wrote on X.
“And at the same time, we will continue to support the European Commission in negotiations to find a solution with the US that averts a tariff spiral,” he added.
Foreign Minister Annalena Baerbock has sharply criticized Trump and warned of consequences due to his trade policy.
“Anyone who uses a wrecking ball to tear down an entire house just because the roof needs retiling is left with ruins that cannot be easily rebuilt,” Baerbock said.
Germany’s main industry association, the BDI, has also warned against a spiralling of tariffs. Wolfgang Niedermark, member of the executive board of the Federation of German Industries (BDI), said that the European Commission must continue to focus on a negotiated solution with the US, knowing Europe’s strategic strengths.
“A spiral of tariffs and countertariffs will further increase the damage caused by the US measures,” Niedermark said.
