Germany warned on Monday that the European Union is prepared to take countermeasures if the United States moves ahead with plans to sharply increase tariffs on European automobile imports.
A file photo of Lars Klingbeil, the federal minister of finance and vice chancellor or Germany, January 19, 2026. (Photo: VCG)
German Vice-Chancellor and Finance Minister Lars Klingbeil urged Washington to honor a previously reached tariff agreement with the EU, cautioning against further escalation.
He emphasized that while Germany seeks a "joint solution" rather than escalation, they are "prepared if an escalation were to occur."
His remarks came after US President Donald Trump said in a social media post that Washington would increase tariffs on EU-made automobiles this week. Trump accused the bloc of failing to comply with a bilateral trade deal, adding that the new policy would impose a 25% tariff on European cars while exempting vehicles manufactured in the US.
The proposed tariff hike has raised alarm among German economists, who warn it could significantly impact the country's export-driven automotive sector. Germany accounts for a substantial share of EU car exports to the US, making it particularly vulnerable to trade restrictions.
The Kiel Institute for the World Economy estimates such measures could reduce Germany's real economic output by around 0.3%, adding pressure to an economy already facing sluggish growth.
EU officials have reiterated that the bloc is ready to take "proportionate countermeasures" to defend its economic interests. Policymakers in Berlin and Brussels are reportedly considering retaliatory tariffs on US goods if Washington proceeds with the planned increase.
Despite the rising tensions, German officials continue to stress the importance of negotiation, leaving the door open for a diplomatic resolution to avoid a broader transatlantic trade dispute.