The German automotive industry has expressed concern over escalating trade tensions between the U.S. and Canada, following U.S. President Donald Trump’s announcement of a planned 50% tariff on passenger vehicles, commercial vehicles, auto parts and steel imports from Canada, effective January 2027.
The Verband der Automobilindustrie (VDA), Germany’s automotive industry association, highlighted the sector’s reliance on stable cross-border trade with Canada. Many German suppliers operate production facilities in Canada, supplying components to U.S. assembly plants, while German manufacturers have also invested in Canadian battery technology production. The VDA warned that frequent changes to tariffs and trade rules, compounded by new threats, create uncertainty that undermines investment decisions.
The dispute intensified after trade talks between the U.S. and Canada collapsed on Friday, with both sides blaming the other for the failure. In response, Trump ordered a 50% tariff on approximately $20 billion worth of Canadian goods, including wine, furniture, dairy products and clothing. Canadian Prime Minister Mark Carney responded over the weekend by announcing retaliatory measures, escalating the risk of broader economic disruption.
German automakers, including Daimler with its EQG electric vehicle line, have significant manufacturing and supply chain links to Canada. The VDA emphasized that the industry requires predictable trade conditions to sustain long-term investments in production capacity and technology development.
