Germany's influential automotive sector has expressed concerns over U.S. President Donald Trump's proposed tariff plans, warning they would increase car prices for American consumers and negatively impact global automakers.

Hildegard Mueller, the president of Germany's VDA auto association, stated that the tariffs could raise U.S. inflation, contradicting Trump's promise to reduce it.

Though Trump has not yet enforced these tariffs, he suggested they might be applied to imports from Canada and Mexico as early as February 1.

Trump has historically used the threat of tariffs to encourage automakers to shift more production to the U.S. Since global automakers, including those from Europe, Japan, and South Korea, significantly depend on Mexico for cars intended for the U.S., the proposed tariffs could disrupt the automotive supply chain.

Shares of major car companies like Honda, Mazda, Hyundai, and Kia, which produce vehicles in Mexico, declined after the tariff announcements.

Volkswagen, the second-largest automaker globally, expressed concerns over the potential adverse effects on the U.S. economy, particularly for American consumers.

The company also highlighted its significant investments in U.S. manufacturing, including more than $10 billion planned for its Chattanooga plant and a joint venture with Rivian.

Automakers have been actively negotiating with Trump's administration to avoid the tariffs, with Stellantis Chairman John Elkann and other executives meeting with top U.S. officials before Trump's inauguration.

Volkswagen, Mercedes-Benz, and BMW, all with factories in Republican-leaning states, have affirmed their dedication to U.S. production, and VDA’s Mueller underscored the economic significance of their U.S. operations.

The automotive industry continues to advocate for a solution that avoids punitive tariffs, stressing the potential harm to U.S. consumers, the broader economy, and the global automotive sector.