US Tariff on Auto Parts from Germany

Germany is a top source of premium automotive parts and vehicles for the US market, home to BMW, Mercedes-Benz, Volkswagen/Audi, Porsche, and major suppliers like Bosch, Continental, and ZF. Tariff rates mirror the Japan structure.

General auto parts: 12.5% total (2.5% MFN + 10% Section 122). Section 232-covered components (engines, transmissions, electrical systems, body parts): 25%. The anti-stacking rule means Section 232 components pay 25% only, not 35%.

Before the SCOTUS ruling, German auto parts faced 20% IEEPA plus MFN rates, making the total approximately 22.5% for general parts. The reduction to 12.5% represents a 10-point improvement.

Germany's key auto parts exports to the US: precision-engineered engine components (BMW, Mercedes), advanced transmissions (ZF), electronic control systems (Bosch, Continental), turbochargers (BorgWarner's German operations), braking systems (Continental), and EV battery components (increasingly important as German OEMs electrify).

The EU-US trade deal advancing through the European Parliament (expected vote late March 2026) could significantly impact these rates. If ratified, it may reduce or eliminate tariffs on certain automotive components, making German parts more competitive.

German auto parts compete primarily with Japan (same rates), Mexico (0% USMCA), and increasingly with Chinese suppliers (37.5% including Section 301). The quality premium of German engineering often justifies the tariff cost for luxury and performance applications, but cost-sensitive segments are increasingly sourcing from Mexico and other USMCA partners.

BMW's Spartanburg (SC), Mercedes' Tuscaloosa (AL), and VW's Chattanooga (TN) plants source some components locally or from Mexico to minimize tariff exposure.