Leading research institution warns German auto industry could sustain heavy loss due to U.S. tariff hike

The Kiel Institute recently warned that the German auto industry could lose 15 billion euros (about 17.6 billion U.S. dollars) in short term from the 25 percent U.S. tariffs on cars of the European Union (EU).

The Kiel Institute, one of Germany's top five economic research institutions, reported on May 1 that the European automotive supply chain remains highly vulnerable to trade conflicts. According to its analysis, new U.S. car tariffs could result in short-term losses of 15 billion euros for Germany's auto sector, with long-term losses potentially reaching 30 billion euros.

In 2025, Germany exported approximately 3.17 million passenger cars, of which nearly 410,000 went to the United States, down nine percent year on year, according to the German Automotive Industry Association.

U.S. President Donald Trump said on May 1 on Truth Social that the EU was not complying with a trade agreement, and announced he will raise tariffs on European cars and trucks to 25 percent.

In response, the European Commission -- the executive arm of the 27-nation EU -- said it will keep options open to protect the EU's interests. A European Commission spokesperson said on the same day that the EU is implementing the relevant trade agreements in line with standard legislative procedures, and continues to keep the U.S. side fully informed throughout.

The U.S. dollar strengthened in late trading on Monday.

The dollar index, which measures the greenback against six major peers, added 0.27 percent to 99.388 at 15:00. (1900 GMT).

In late New York trading, the euro fell to 1.1557 dollars from 1.1596 dollars in the previous session, and the British pound declined to 1.3511 dollars from 1.3525 dollars in the previous session.

The U.S. dollar bought 154.05 Japanese yen, higher than 153.72 Japanese yen of the previous session. The U.S. dollar was down to 0.8163 from 0.8166 Swiss francs, and it climbed to 1.3902 from 1.3865 Canadian dollars. The U.S. dollar rose to 9.7412 from 9.7044 Swedish kronor.