Trump’s Tariffs Reshape Global Automotive Supply Chains: China and Germany Forge Closer Ties

In March 2025, the Trump administration announced a 25% tariff on imported automobiles and key auto parts, including engines, transmissions, powertrain components, and electrical systems. For Chinese auto parts, the cumulative effect of various tariffs has pushed the total levy to over 70%.

In retaliation, China imposed an additional 10% tariff on large vehicles, pickup trucks, and automotive components imported from the U.S. The Chinese government also filed a formal complaint with the World Trade Organization (WTO), arguing that the U.S. measures represent a serious violation of WTO rules.

In 2024, China imported a total of $29.44 billion worth of automotive components. A significant portion of these imports came from the United States, including engines, transmissions, electronic control units (ECUs), sensors, braking systems, and airbags.

Facing the increased tariffs, Chinese automakers have been actively seeking alternative supply chain solutions. One key strategy has been to strengthen partnerships with European—particularly German—auto parts suppliers. German firms such as Bosch, ZF Friedrichshafen, Continental, and Schaeffler have established themselves as global leaders in powertrain technologies, electrification, and autonomous driving, making them increasingly important partners for Chinese manufacturers.

Overall, the Trump administration’s tariff policies have had a significant impact on the automotive supply chain between China and the United States. At the same time, they have accelerated China’s efforts to diversify and localize its supply chain, while also deepening automotive cooperation between China and Germany.