A recent analysis report by the Kiel Institute for the World Economy in Germany highlights that the proposed US plan to raise tariffs on cars imported from the EU is poised to inflict significant damage on the German economy. In the immediate term, the German automotive sector is projected to incur output losses amounting to €15 billion, with the potential for long-term losses to escalate to as much as €30 billion. The European automotive supply chain is particularly exposed in this trade dispute, with nations such as Italy, Spain, and Switzerland also anticipated to face substantial losses. President Trump has announced his intention to increase tariffs on EU cars imported into the US from the current 15% to 25% next week, citing the EU's alleged failure to adhere to trade agreements. The US represents a pivotal export market for German cars, with approximately 410,000 vehicles exported from Germany to the US in 2025, reflecting a 9% year-on-year decrease.