‘If VW disappears, people won’t stay in the town anymore’ – fears over Trump’s car tariffs
At one factory in East Germany, they’re pumping out a car part every second, cutting and pressing millions of pieces destined for the country’s mega motor industry.
The HENNgineered plant sits on the edge of Zwickau, a city where the car is king. And when it comes to vehicles, America is Germany’s most important trading partner.
In 2024, automotive exports to the US reached a total value of €36.8bn (£30.7bn), according to the German Automobile Association.
So, Donald Trump’s decision to introduce 25% tariffs on all passenger cars and light commercial vehicles imported into the US is a big problem for manufacturers and suppliers alike.
Trump’s tariffs could prove a big problem for car manufacturers and suppliers like HENNgineered in Zwickau
This factory makes a car part every second, cutting and pressing millions of pieces
There are fears about future jobs after Donald Trump announced latest tariffs on car imports
“Such tariffs would be very hard. It could make companies decide to move to the US to produce there, which might also mean jobs are lost here in Germany,” explains site manager Matthias Wissel.
Volkswagen is now the main local employer, providing around 10,000 jobs.
Read more: Trump’s car tariffs condemned
But car building is in people’s blood, with the first vehicle made here around 120 years ago.
The city museum proudly displays cars through the ages.
One room hosts shiny silver racing cars, another brightly coloured Trabants.
The August Horch Museum in Zwickau showcases the city’s long history of car making
The city developed cars from the German empire right through to the current modern republic, explains Thomas Stebich, head of August Horch Museum.
While the immaculate car displays celebrate the city’s pioneering past, tariffs are making many feel uncertain about the future.
“If nobody in the US buys a German car or less people buy German cars, it will have an impact, of course, because we need to build high numbers of cars here [for jobs],” Stebich says.
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If you want to understand how key the auto industry is to German identity, think mining to the UK in its heyday.
Around 700,000 people are employed in the industry, which generates more than 540 billion euros in sales a year.
But tariffs are not the first storm German car manufacturers have had to weather.
High energy and labour costs, competition from China and weaker domestic demand due to the ailing economy mean the German car industry has been cutting jobs.
Audi recently announced it will cut 7,500 administration jobs by 2029.
By 2030, VW will lose 35,000 roles.
Read more from Sky News:
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They’re not the only ones, but Trump’s tariffs news comes as a fresh blow to workers.
A representative on the VW works council in Zwickau cancelled our interview due to crisis talks.
All the workers we met seemed pessimistic and deeply worried for the plant and the city’s future.
Their concern is shared by Aliriza Oernek, who owns four restaurants in Zwickau.
He says in recent years they’ve seen many of their young people leave the area to seek jobs elsewhere. He fears fresh pain from tariffs will hurt the whole community.
“Volkswagen is the biggest employer in Zwickau, the main source of money for people who live here. If they were to disappear, then people won’t stay in the town anymore,” he says.
Aliriza Oernek, owns four restaurants in Zwickau, and worries that tariffs will hurt businesses like his
Like its counterparts, Volkswagen is closely watching developments around tariffs and assessing how they could impact the supply chain and production.
All eyes are currently on the European Union to see how it will retaliate.
In a statement, a spokesperson for VW Group said they “share the assessment of most experts that US tariffs and any counter-tariffs will have negative consequences for growth and prosperity in the US and other economic areas… and continue to advocate for constructive talks”.
So, while car makers brace for impact, Germany’s vowed it will “not take this lying down”, calling for a “firm response” from the EU as it tries to protect its automakers from this new American attack.
The fast-moving developments on Trump’s Ukraine peace deal are dominating the G20 summit in South Africa, as European leaders scramble to put together a counter-proposal to the US-Russia 28-point plan and reinsert Ukraine into these discussions.
European countries are now working up proposals to put to President Trump ahead of his deadline of Thursday to agree a deal.
Ukraine is in a tight spot. It cannot reject Washington outright – it relies on US military support to continue this war – but neither can it accept the terms of a deal that is acutely favourable to Russia, requiring Ukraine to give up territory not even occupied by Moscow and reducing its army.
Overnight, the UK government has reiterated its position that any deal must deliver a “just and lasting peace”.
Ukraine war latest: Kyiv to discuss ending war in talks in Switzerland
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Keir Starmer calls for growth plan at G20
The prime minister, who spoke with E3 allies President Macron of France, Chancellor Merz of Germany and President Zelenskyy of Ukraine on the phone on Friday, is having more conversations today with key partners as they work out how to handle Trump and improve this deal for Ukraine.
One diplomatic source told me allies are being very careful not to criticise Trump or his approach for fear of exacerbating an already delicate situation.
Instead, the prime minister is directing his attacks at Russia.
Read more:
Trump’s 28-point Ukraine peace plan in full
Analysis: We could all pay if Europe doesn’t guarantee Ukraine’s security
Prime Minister Keir Starmer attends a plenary session on the first day of the G20 Leaders’ Summit. Pic: Reuters
“There is only one country around the G20 table that is not calling for a ceasefire in Ukraine and one country that is deploying a barrage of drones and missiles to destroy livelihoods and murder innocent civilians,” he said on Friday evening.
“Time and again, Russia pretends to be serious about peace, but its actions never live up to its words.”
Pic: AP
On the Trump plan, the prime minister said allies are meetin on Saturday “to discuss the current proposal on the table, and in support of Trump’s push for peace, look at how we can strengthen this plan for the next phase of negotiations”.
Strengthening the plan really means that they want to rebalance it towards Ukraine’s position and make it tougher on Russia.
“Ukraine has been ready to negotiate for months, while Russia has stalled and continued its murderous rampage. That is why we must all work together with both the US and Ukraine, to secure a just and lasting peace once and for all,” said the prime minister.
“We will continue to coordinate closely with Washington and Kyiv to achieve that. However, we cannot simply wait for peace.
“We must strain every sinew to secure it. We must cut off Putin’s finance flows by ending our reliance on Russian gas. It won’t be easy, but it’s the right thing to do.”
Pic: AP
Europeans hadn’t even seen this deal earlier in the week, in a sign that the US is cutting other allies out of negotiations – for now at least.
Starmer and other European leaders want to get to a position where Ukraine and Europe are at least at the table.
There is some discussion about whether European leaders such as Macron and Meloni might travel to Washington to speak to Trump early next week in order to persuade him of the European and Ukrainian perspective, as leaders did last August following the US-Russian summit in Alaska.
But Sky News understands there are no discussions about the PM travelling to Washington next week ahead of the budget.
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