ADVERTISEMENTGermany’s benchmark stock index, the DAX, rose for the sixth consecutive trading day on Tuesday, poised to recover all losses in early April. The rally reflected global market trends as the Trump administration introduced further amendments to its tariff policy, easing concerns over a possible recession.
On Tuesday, US President Donald Trump signed two directives aimed at reducing the tariff burden on automakers. The White House had confirmed Trump’s decision on Monday, while the official documents were signed after European markets closed on Tuesday.
The first executive order granted tariff relief by preventing automakers from being subjected to overlapping duties, such as those already levied on steel and aluminium. “The rate of duty resulting from such stacking exceeds what is necessary to achieve the intended policy goals,” Trump stated in the order.
In a separate proclamation, Trump revised the 25% tariff policy on auto parts, due to begin on 3 May, allowing automakers who complete vehicle assembly in the US to claim an offset equivalent to 3.75% of the retail price in the first year, through to 30 April 2026. This relief will be reduced to 2.5% in the following year.
Trump told reporters that the changes were intended to give automakers time to shift production to the US, following intense lobbying from industrial leaders. Economists and analysts have warned that such tariffs would significantly increase manufacturing costs and push vehicle prices up by thousands of dollars. These negative effects, they argued, would ultimately damage the US auto industry, leading to job losses and factory closures.
Several global car manufacturers, including Stellantis NV, Ford Motor, General Motors Co., Volkswagen AG, and Toyota Motor Corp., have already planned production pauses in Canada and Mexico, or have introduced discounts to retain customers as they face risks of falling profit margins and weaker sales.
Germany’s auto stocks surge as DAX nears monthly high
Germany remains the largest European car exporter to the US, with $24.8 billion (€21.8 billion) worth of vehicles sold to America in 2024. Trump’s decision to ease car tariffs is therefore seen as a positive development for Germany’s auto industry and is likely to continue driving a rebound in auto-related stocks.
German auto stocks have posted notable gains since Trump’s 90-day pause on reciprocal tariffs was announced three weeks ago. Shares in major automakers such as Mercedes-Benz, Volkswagen, and BMW have surged by nearly 20% over the period, fully reversing their losses earlier in the month.
At the same time, the DAX has benefitted from a broader rally, climbing 21% from its low on 7 April and approaching its monthly high. Year-to-date, the index has risen by 13%, making it the best-performing major index globally—a stark contrast to the S&P 500, which has declined by 5.5%. The DAX now stands just 4% below its all-time high recorded in March.
“European assets are certainly gaining traction for several reasons: there’s definitely the end of US exceptionalism, but there’s also hope the tariffs will also come down on Europe, and the fiscal impulse in Europe as it remilitarises will be historically strong,” wrote Kyle Rodda, senior market analyst at Capital.com, in an email.