European car manufacturers are strategizing on how to adjust their prices in response to impending U.S. import tariffs without invoking a negative reaction from President Donald Trump, according to sources in the industry. The U.S. recently announced a 25% duty on imported finished cars and components starting April 3, leaving European car companies, particularly Germany's major automakers, vulnerable due to their heavy exposure. Companies are considering options like reducing discounts and increasing prices to offset the impact of the tariffs. However, most are cautious about being the first to raise prices, with concerns over potential retaliation from Trump. The uncertainty surrounding tariffs adds to existing challenges faced by carmakers, such as slow demand, high labor costs, and competition from Chinese rivals. While some companies like Ferrari and Valeo have announced plans to increase prices in response to the tariffs, others are hesitant to disclose their strategies, fearing repercussions from the U.S. president, who aims to discourage price hikes and encourage production in the U.S. German automakers like Volkswagen, Porsche AG, BMW, and Mercedes-Benz have refrained from commenting on potential price adjustments. UBS analysts predict a significant negative impact on earnings per share for German carmakers due to the U.S. tariffs, with Porsche and Ferrari anticipated to fare better in passing on tariff costs for their unique models.