In April and May, Germany's auto exports to the U.S. market plunged by 23.5 percent after Washington imposed a 25 percent tariff on vehicle imports from the European Union (EU).

BERLIN, July 18 (Xinhua) -- Germany's car exports to the United States fell sharply in April and May after new tariffs from Washington took effect, despite only a modest overall decline of 1.9 percent in the first five months of 2025, official data showed Friday.

According to the Federal Statistical Office (Destatis), vehicle shipments to the United States rose by 14.7 percent year-on-year in the first quarter. However, in April and May, exports plunged by 23.5 percent after Washington imposed a 25 percent tariff on vehicle imports from the European Union (EU).

The first-quarter surge was largely driven by front-loaded orders, as American customers rushed to buy ahead of the planned tariff hike initiated by U.S. President Donald Trump. Once the duties took effect on April 3, German car exports were hit harder than industry analysts had anticipated.

Germany's automotive industry association, VDA, had previously warned that the additional auto tariffs would significantly impact EU car exports to the United States. It also highlighted the potential damage to global supply chains and increased costs for American consumers.

"The additional U.S. tariffs send a disastrous signal for free, rules-based trade," the association said, adding that Trump's tariff policy had already faced criticism from within the U.S. industry and would ultimately hamper economic growth and prosperity on both sides of the Atlantic.

The United States has long been Germany's largest trading partner in the automotive sector. In 2024, Germany exported vehicles worth 36.8 billion euros (42.8 billion U.S. dollars) to the United States, while importing 7.9 billion euros, according to VDA data.

Eurostat figures released this week confirmed that the United States remains the top destination for EU automotive products, accounting for 20 percent of the EU's total domestic value added in the sector. Germany is by far the bloc's largest vehicle exporter to the United States.

Germany's three largest carmakers - Volkswagen, Mercedes-Benz, and BMW - are responsible for around 73 percent of EU car exports to the United States last year, according to German media reports. All three have reportedly come under growing pressure following the tariff hikes.

Porsche, the luxury sports carmaker owned by the Volkswagen Group, is considering further cost-cutting measures in response to weakening sales and rising expenses, German press agency dpa reported Friday.

In a letter to employees, Porsche CEO Oliver Blume admitted that the company's recent performance had fallen short of expectations and warned of further structural adjustments. Last week, the company reported a 6 percent drop in global sales for the first half of the year.

Beyond sluggish EV demand and a softening luxury market, Porsche is also facing pressure on profit margins in the United States due to the new import tariffs. The company estimates it has incurred approximately 300 million euros in extra costs under price protection measures to offset the higher U.S. duties in April and May.

"All of this is hitting us hard -- harder than many other car manufacturers," Blume said.

Meanwhile, Destatis import data showed that U.S.-made vehicles are also losing ground in the German market. In the first five months of 2025, imports from the United States dropped by more than 30 percent year-on-year, falling to fifth place behind China.

That decline indicates that U.S. automakers, which include German brands producing in America, are also facing significant losses. According to the VDA, the United States exported 233,600 vehicles worth 10.3 billion euros to the EU in 2024, with around 60 percent of them destined for Germany. Half of the vehicles produced by German companies in the United States are exported to markets worldwide. (1 euro = 1.16 U.S. dollars)