‘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:
UK firms plead for tariff deal with Trump
What will happen on ‘liberation day’?
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.
They rose to their feet in ecstatic surprise, shouting “heydar, heydar” – a Shia victory chant.
This was the first public appearance of their supreme leader since Israel began attacking their country.
He emerged during evening prayers in his private compound. He said nothing but looked stern and resolute as he waved to the crowd.
He has spent the last weeks sequestered in a bunker, it is assumed, for his safety following numerous death threats from Israel and the US.
His re-emergence suggests a return to normality and a sense of defiance that we have witnessed here on the streets of Tehran too.
Earlier, we had filmed as men in black marched through the streets of the capital to the sound of mournful chants and the slow beat of drums, whipping their backs with metal flails.
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Defiance on streets of Tehran
This weekend they mark the Shia festival of Ashura as they have for 14 centuries. But this year has poignant significance for Iranians far more than most.
The devout remember the betrayal and death of Imam Hussein as if it happened yesterday. We filmed men and women weeping as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.
The armies of the Caliph Yazid killed the grandson of the Prophet Muhammad in the seventh-century Battle of Karbala.
Shiite Muslims mark the anniversary every year and reflect on the virtue it celebrates, of resistance against oppression and injustice.
But more so than ever in the wake of Israel and America’s attacks on their country.
The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here among people and officials.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.
Iran believed it was making diplomatic progress in talks with America it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.
Death to Israel chants resounded outside the mosque in skies which were filled for 12 days with the sounds of Israeli jets. There is a renewed sense of defiance here.
One man told us: “The lesson to be learned from Hussein is not to give in to oppression even if it is the most powerful force in the world.”
A woman was dismissive about the US president. “I don’t think about Trump, nobody likes him. He always wants to attack too many countries.”
Pictures on billboards nearby draw a line between Imam Hussein’s story and current events. The seventh-century imam on horseback alongside images of modern missiles and drones from the present day.
Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.
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Officially Iran is projecting defiance but not closing the door to diplomacy.
Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.
“We are very strong in defence and as state officials have announced, this time Israel will receive an even stronger response compared to previous times,” she said.
“We hope that Israel will not make such a mistake.”
But there is also a hint of conciliation: Senior Iranian officials have told Sky News that back-channel efforts are under way to explore new talks with the US.
Israel had hoped its attacks could topple the Iranian leadership. That proved unfounded, the government is in control here.
For many Iranians, it seems quite the opposite happened – the 12-day war has brought them closer together.
To the sound of mournful chants and the slow beat of drums, they march, whipping their backs with metal flails.
It is an ancient ceremony going back almost 14 centuries – the Shia commemoration of Ashura.
But this year in particular has poignant significance for Iranians.
The devout remember the betrayal and death of the Imam Hussein as if it happened yesterday.
Iranians gather ahead of Ashura
We filmed men and women weep as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.
The grandson of the Prophet Muhammad was killed by the armies of the Caliph Yazid in the seventh century Battle of Karbala.
Shia Muslims mark the anniversary every year and reflect on the virtue it celebrates – of resistance against oppression and injustice. But more so than ever this year, in the wake of Israel and America’s attacks on their country.
The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here by people and officials.
Men and women weeped as they worshipped at the Imamzadeh Saleh Shrine
Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.
Iran believed it was making diplomatic progress in talks with America, which it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.
“Death to Israel” chants resounded outside the mosque in skies that for 12 days were filled with the sounds of Israeli jets.
There is a renewed sense of defiance here.
One man told us: “The lesson to be learned from Hussein is not to give in to oppression, even if it is the most powerful force in the world.”
‘I don’t think about Trump. Nobody likes him,’ one woman tells Sky News
A woman was dismissive about the US president.
“I don’t think about Trump. Nobody likes him. He always wants to attack too many countries.”
Pictures on billboards nearby link Imam Hussein’s story and current events. They show the seventh century imam on horseback alongside images of modern missiles and drones from the present day.
Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.
Officially Iran is projecting defiance, but not closing the door to diplomacy.
Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.
“We are very strong in defence, and as state officials have announced, this time Israel will receive an even stronger response compared to previous times. We hope that Israel will not make such a mistake.”
Dr Fatemeh Mohajerani said it would be a mistake for Israel to attack again
But there is also a hint of conciliation. Senior Iranian officials have told Sky News back-channel efforts are under way to explore new talks with the US.
Israel had hoped its attacks could topple the Iranian leadership. Those hopes proved unfounded. The government is in control here.
For many Iranians it seems quite the opposite happened – the 12-day war has brought them closer together.
World
Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says
Two American security workers in Gaza were injured after grenades were thrown during food distribution in Khan Younis, the Gaza Humanitarian Foundation (GHF) has said.
In a statement, the US and Israeli-backed aid group said a targeted terrorist attack was carried out at one of its sites in southern Gaza on Saturday morning.
The two Americans injured “are receiving medical treatment and are in stable condition,” it said, adding that the delivery of aid was “otherwise successful” and that “no local aid workers or civilians were harmed”.
GHF didn’t say exactly when the incident happened but claimed Hamas was behind the attack, adding: “GHF has repeatedly warned of credible threats from Hamas, including explicit plans to target American personnel, Palestinian aid workers, and the civilians who rely on our sites for food.
“Today’s attack tragically affirms those warnings.”
Later, the aid group posted a picture on social media, which it said showed “fragments of a grenade packed with ball bearings” that was used in the attack.
Asked by Sky’s US partner network, NBC News, whether the two injured individuals were responsible for handing out aid or were responsible for providing security, GHF said they were “American security workers” and “two American veterans.”
The aid group did not provide specific evidence that Hamas was behind the attack.
The US and Israeli-backed group has been primarily responsible for aid distribution since Israel lifted its 11-week blockade of the Gaza Strip in May.
Read more:
Hamas gives ‘positive’ response to ceasefire proposal
Outcry as Israeli strike hits school
94 killed in Israeli strikes in Gaza, health staff say
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It comes after Sky News analysis showed GHF aid distributions are associated with a significant increase in deaths in Gaza.
According to Gaza’s health ministry, 600 Palestinians have been killed while seeking aid from GHF sites as of 3 July, which charities and the UN have branded “death traps”.
Meanwhile, the Associated Press has reported that Israeli-backed American contractors guarding GHF aid centres in Gaza are using live ammunition and stun grenades.
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Contractors allege colleagues ‘fired on Palestinians’
GHF has vehemently denied the accusations, adding that it investigated AP’s allegations and found them to be “categorically false”.
Israel’s military added that it fires only warning shots and is investigating reports of civilian harm.
It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.
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