‘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.

“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 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.

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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.

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.