When war is declared, Truth is the first casualty.
- Arthur Ponsonby
'Liberation Day': How Trump declared a tariff war on the world | About That
Dark Clouds Over the German Auto Industry: Who Wins from Trump's Trade War?
Donald Trump has spoken—again. And this time, the result is nothing short of a full-scale trade war.
Welcome to the "Tariff Tsunami" era, where globalization, supply chains, and economic interdependence are now quaint relics of a bygone age.
The German auto industry, long accustomed to thriving in an interconnected world, is now caught in a perfect storm: the shift to electric vehicles, Russia’s war in Ukraine, the looming specter of a Chinese invasion of Taiwan, and now, a lunatic with a tariff fetish running the White House.
For an industry that relied on selling millions of cars in the U.S. while maintaining production hubs worldwide, this is nothing short of an economic disaster.
For Volkswagen, the pain will be particularly acute. Porsche and Audi, its crown jewels, don’t manufacture in the U.S. and will now see their margins slashed by punitive tariffs.
The same goes for BMW and Mercedes, which until yesterday thought their American plants were a ticket to tariff-free exports.
But Trump’s new tariffs are a wrecking ball—one that smashes even German-built cars made on U.S. soil.
The numbers are grim: Financial analysts predict profit drops of 30% for Volkswagen and Stellantis (Chrysler, Jeep, Peugeot, Opel) and 20% for BMW and Mercedes.
Official profit warnings?
Just a matter of time. With the European car market already struggling under heavy-handed CO2 regulations, these tariffs could be the final nail in the coffin for some manufacturers.
Burning Globalization at the Stake: Who Besides Russia Profits?
Trump's logic, if you can call it that, follows an archaic economic philosophy that predates even his haircut.
It’s pure, undiluted mercantilism—a belief that a nation can simply close its borders, manufacture everything in-house, and somehow emerge richer.
It’s the economic equivalent of North Korea’s self-reliance doctrine, except with cheeseburgers and golf courses.
The last time the U.S. tried this—during the Great Depression—the results were, well, catastrophic.
Herbert Hoover signed the Smoot-Hawley Tariff Act in 1930, jacking up tariffs to "protect" American industry. The rest of the world retaliated, global trade collapsed, and before you could say "economic suicide," the world was spiraling into the worst economic crisis in history.
A few years later? World War II.
So, who benefits from this madness?
Russia, for one. Putin must be popping champagne. A fractured, economically isolated West is precisely what the Kremlin dreams of. The EU and the U.S. at each other’s throats over tariffs?
China licking its lips at a weakened Western supply chain?
What more could an autocrat ask for?
Then there’s the U.S. corporate elite—the same folks who whisper into Trump’s ear between rounds of golf. American car manufacturers have been losing the race against European and Asian competitors for decades.
With tariffs, suddenly, German and Japanese automakers are in deep trouble, while GM and Ford get a chance to limp back into relevance.
The only catch?
Those "made in America" cars will be built with foreign parts, sold at inflated prices, and still be two decades behind the tech curve.
Meanwhile, European politicians now face a choice: Fight fire with fire, imposing retaliatory tariffs, or take the high road and let Trump set the world on fire alone.
Brussels, for once, should avoid its usual self-destructive instincts. Trade wars are like nuclear wars: Everyone loses.
The Endgame: Welcome to Economic Darwinism
In this new era of economic nationalism, the biggest casualties won’t be billion-dollar corporations.
They’ll survive—either by lobbying for exemptions or passing costs to consumers. The real losers?
Middle-class workers who will either pay absurd prices for their cars or lose their jobs as factories close. And let’s not forget small businesses that rely on global supply chains, only to find themselves crushed under Trump’s economic wrecking ball.
The harsh reality?
America’s economic isolationism won’t make it stronger. It will make it dumber, poorer, and more volatile. The EU, if it plays this right, can turn America’s self-imposed exile into an opportunity—strengthening ties with Asia, Africa, and Latin America while America throws a trade tantrum.
Trump, for all his "genius," has unwittingly handed Russia and China a golden opportunity.
With America sabotaging itself, the question is:
Will Europe let itself get dragged into the abyss, or will it finally learn how to play the game?
Sincerely,
ADAPT OR DIE!
WE ARE READY! ARE YOU?
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