The European Commission defends the 15 percent "tariff deal" with the U.S. as a "decision for stability and predictability." However, an ever-growing list of critical machinery products has been left vulnerable to the much higher tariffs on steel and aluminum derivatives. This now threatens the existence of many European machinery companies. The VDMA urges the European Commission to work toward a solution.

Frankfurt/Brussels, August 27, 2025 – The European Commission sees its tariff agreement with the U.S. as an act of "stability and predictability." In an editorial article for the German daily newspaper “Frankfurter Allgemeine Zeitung,” European Commission President Ursula von der Leyen writes: "The most important element of our agreement is that we have drawn a very clear line at 15 percent for most EU products, including passenger vehicles and medicines." However, Ms. von der Leyen fails to mention two key points that cast the "tariff deal" in a different light. First, the U.S. has significantly expanded the list of products to which the much higher steel and aluminum tariffs apply. As a result, around 30 percent of US machinery imports from the EU are now subject to a 50 percent tariff on the metal content of the product. For many companies in the manufacturing sector, such as machinery and equipment manufacturing, this means that their entire U.S. business is at risk.

Secondly, the list of steel and aluminum tariffs is to be revised every four months and expanded unilaterally by the U.S. Department of Commerce. Instead of planning security, as announced by the Commission, uncertainty will continue to prevail in transatlantic trade because the "tariff deal" is not permanent. In addition, there is a considerable additional burden of bureaucracy because the steel and aluminum tariffs are determined in a complex procedure: Among other things, companies must provide declarations on the country of melt and pour (for steel) or smelt 2 and cast (for aluminum) for every ounce of metal in the product, and proof of the price of the metal content. The typical medium-sized machinery and equipment manufacturing company is unable to obtain this data in detail.

The VDMA has therefore addressed President von der Leyen in an open letter. In it, VDMA President Bertram Kawlath writes: "We urge the Commission to make all available efforts to relieve the EU from tariffs on steel and aluminum derivatives, and to ensure that machinery and equipment are excluded from future sectoral tariffs."

Around 150 new products have already been added to the list of steel derivatives that will be subject to a 50 percent tariff on the metal content of the product in the future. These include motors, pumps, industrial robots and agricultural and construction machinery. At the next review in four months, further products could be added, such as drones or wind turbines and their components. For the industry, this is an unacceptable outcome of a "tariff deal" that was supposed to bring stability.

Since the U.S. tariffs were first introduced, the VDMA has expressed cautious optimism that a permanent 15 percent tariff could at least provide planning security for companies. However, following the agreement that has now been reached, VDMA President Bertram Kawlath concludes that the new steel and aluminum tariffs have once again unsettled European industry. "The harm caused by them, along with the prospect of still more in the months to come, are sending key machinery sectors hurdling toward the precipice of an existential crisis,” he warns.

The VDMA represents 3,600 German and European companies in the mechanical and plant engineering sector. The industry stands for innovation, export orientation, and small and medium-sized enterprises. The companies employ a total of around 3 million people in the EU-27, more than 1.2 million of them in Germany alone. This makes mechanical and plant engineering the largest employer among the capital goods industries, both in the EU-27 and in Germany. It accounts for an estimated turnover of around 870 billion euros in the European Union. Around 80 percent of the machinery sold in the EU comes from a manufacturing facility in the internal market.