Overview

• The U.S. has enacted 25% tariffs on imported auto parts, following similar duties on cars implemented in April, with limited exemptions for U.S.-assembled vehicles.
• Automakers now face combined duties of up to 27.5%, with German exporters and other foreign manufacturers warning of significant financial burdens.
• Federal Reserve Chair Jerome Powell has resisted calls from President Trump to cut interest rates, citing tariff-driven inflation risks and maintaining the Fed's independence.
• Economists, including DIW experts and Nobel laureates, warn that U.S. trade policies could lead to stagflation, with stagnating growth and rising inflation impacting global markets.
• An ECB survey reveals that 44% of Europeans are likely to avoid U.S. brands regardless of price, signaling potential long-term shifts in consumer behavior away from American products.