German carmakers strengthen US ties despite economic uncertainties

German carmakers, one of the United States’ major trading partners, are expressing optimism about trade relations under the new Trump administration, despite surveys pointing to a more pessimistic outlook.

In a recent survey assessing the potential impact of Donald Trump’s US presidency on the economy, economists from Germany, Austria, and Switzerland expressed some of the most negative views—more so than their counterparts in Canada and the US.

However, German car manufacturers, responsible for approximately one-fifth of German exports to the US, are highlighting positive aspects in their public communications.

“We see ourselves as part of US society,” said VW Group CEO Oliver Blume in an interview with Bild am Sonntag.

Blume emphasized that VW would continue collaborating with the incoming US administration in a “tried and tested way,” citing plans to invest over 5 billion euros in its plant in Chattanooga, Tennessee, and another 5 billion euros in a joint venture with electric vehicle manufacturer Rivian.

Nevertheless, VW could encounter commercial challenges in the US. Certain models destined for the Americas are manufactured in Mexico, potentially exposing them to separate tariffs upon import into the US. Although rumors of relocating the domestic electric vehicle production facility in Zwickau to the US have been denied for now, this position could change in the future.

At the Brussels Motor Show last week, Mercedes-Benz CEO Ola Källenius echoed similar sentiments, noting that his company has been operating in the US for “over 100 years” with “deep investments and roots” on both sides of the Atlantic.

As the president of the EU’s auto industry association (ACEA), Källenius advocated for a “grand bargain” between the EU and the new Trump government. “Whenever an economic region resorts to the blunt instrument of simply raising tariffs, this hinders growth,” he said.

Other German automakers, such as BMW and DaimlerTruck, also expressed support for free trade and optimism that tariffs could be avoided when responding to media questions about the Trump administration.

In the first half of 2024, German exports to the US amounted to 80.7 billion euros, while imports from the US totaled only 46 billion euros.

Conversely, German businesses are preparing for potential negative repercussions from Donald Trump’s return to the White House. A special economic survey conducted by the German Institute of Economics (IW), close to employer groups, and published in Handelsblatt revealed that nearly one-third of over 2,000 surveyed companies foresee significant competitive disadvantages stemming from higher energy costs.

Additionally, 28% of surveyed companies predict Trump’s presidency will weaken the global economy due to increased economic uncertainty, protectionism, and associated drawbacks.