VDA President Hildegard Statement Regarding the EU-US Declaration on the Trade Deal

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VDA President Hildegard Müller (German Association of the Automotive Industry) welcomes the recent EU-US statement on the trade agreement as a significant step toward relieving the European automotive industry. While the mutual reduction of tariffs raises hopes, Müller warns of the new, still high tariff rates and urges for long-term solutions to restore low tariffs.

"It is a positive sign that the US and the EU have finally agreed on a joint document on their tariff agreement announced on July 27, 2025. The provisions for mutual tariff reductions are particularly important for the European automotive industry - extremely important news, given that the burdens ran into billions of euros and dollars. At the same time, the tariffs that will soon apply, at 15%, will be significantly higher than the original 2.5% for exports to the US. The long-term goal must be to return to a lower tariff rate.

According to the framework agreement published today, the US will reduce its tariffs on passenger cars from the currently applying 27.5% to 15%. The additional tariffs on parts, which amount to 25%, will also be reduced, resulting in a total tariff of 15%. This is contingent on the EU implementing its promised tariff reductions. Should the EU initiate this in August, the tariffs for the month of August could even be reimbursed retroactively. Given the many challenges facing the economy, it is imperative that the EU acts swiftly. Companies urgently need clarity and planning security.

Equally positive is the commitment to regulatory cooperation which the agreement also contains: existing standards are to be mutually recognized and future standards are to be developed jointly. This is beneficial also beyond the automotive industry on both sides of the Atlantic.

Overall, we are confident that this agreement will provide a positive boost to the important transatlantic relationship. Our industry is closely intertwined with over 2,000 locations in the USA. German manufacturers are among the largest exporters to the USA, and conversely, German locations delivered around 450,000 vehicles to the USA last year. It is therefore important that transatlantic trade is not 'punished' with tariffs, but rather facilitated. Both sides of the Atlantic benefit from this.

At the same time, it must not be forgotten that the US tariffs now agreed upon will also burden the German automotive industry. This makes it all the more important that Berlin and Brussels resolutely tackle their own homework with regard to locational attractiveness and competitiveness.

The tariff dispute with the US has once again made it crystal clear: The EU must find new economic strength and, to do so, make the framework in Europe internationally competitive for both companies and investors. Only in this way the EU will become more attractive and relevant as an investment location. Furthermore, the EU must resolutely conclude free trade agreements and raw materials partnerships with as many regions of the world as possible. The EU is on the right track here; what's needed now is more speed, more determination, and more pragmatism than in the past."