The German association representing manufacturers of plants and machinery cautioned on Wednesday that the industry is encountering an “existential crisis” following the U.S. expansion of metal import duties.
In a message addressed to European Commission President Ursula von der Leyen, the VDMA business association cautioned that the increased tariffs have introduced a new wave of doubt spreading across European manufacturing.
“The damage they have inflicted, combined with the expectation of further issues in the coming months, is pushing major industrial sectors towards the edge of an existential crisis,” stated the group’s president, Bertram Kawlath.
In late July, the European Union reached an agreement with U.S. President Donald Trump, resulting in a uniform 15 percent tariff on goods exported from Europe to America; however, discussions remain ongoing.
However, the VDMA, representing around 3,600 firms in Europe’s largest economy, stated that the U.S. decision to increase steel and aluminum duties raised the taxes significantly higher than previously for certain items.
Earlier this year, Trump introduced a 50% tax on various metals. Last week, the Commerce Department expanded the scope to include numerous additional items made with steel and aluminum components.
Consequently, approximately 30% of U.S. machinery imports from Europe currently encounter a 50% tax on the metallic components of these goods, as reported by the VDMA.
The list of impacted items is expected to grow every four months, it cautioned.
Besides the tariff costs, the additional duties impose “painful new administrative challenges,” including more documentation, according to the group.
Kawlath called on von der Leyen to intensify actions aimed at reducing the effect of additional duties, “and to make sure that machines and devices are not included in upcoming industry-specific taxes.”
The surge of Trump’s tariffs adds another challenge for German producers who are still dealing with a prolonged economic decline.
More than a quarter of a million positions have disappeared from Germany’s manufacturing sector since 2019, as reported by a research paper released by consulting firm EY on Tuesday.