Germany's VDMA slams EU's exemption plans for U.S. goods

Germany's VDMA machinery and equipment manufacturers lobby on Friday called the EU's planned tariff exemption for certain products from the United States "a direct slap in the face" and said the EU Commission needed to "urgently renegotiate."

On Thursday, the European Commission proposed removing duties on imported U.S. industrial goods in return for reduced U.S. tariffs on European cars.

The United States agreed to reduce its tariffs on cars built in the European Union to 15 percent from 27.5 percent from the first day of the month in which the EU's legislative proposal was presented – meaning from August 1.

The agreement ended conflict between the world's two largest trading and investment partners, although it is an asymmetric deal, with Brussels required to cut its duties and buy more U.S. energy products while Washington retains tariffs on 70 percent of EU exports.

Trump has periodically railed against the EU, saying in February that it was "formed to screw the United States" and has been critical of the U.S. merchandise trade deficit with the EU, which in 2024 amounted to $235 billion.

EU governments have broadly said they accept the deal as the lesser of evils, mindful that Trump was otherwise set to impose 30 percent tariffs on almost all imported EU goods.

But the VDMA criticized the deal, warning it could hurt the machinery sector.

"Duty-free access for U.S. products while simultaneously extending punitive tariffs to European machinery – that would not only be unbalanced, but also a direct slap in the face for one of the pillars of European industry," said the VDMA.

The lobby, which represents some 3,600 German and European firms, warned that there would be serious consequences to such a move, including job losses and enormous competitive disadvantage.

"The EU Commission must urgently renegotiate. Mechanical engineering products must be clearly and permanently exempted from sectoral tariffs," said the VDMA.

(With input from Reuters)