Germany exports a lot of cars to the US. Yes, it is that simple and stupid sadly.

Can somebody explain..

Two ways of answering this:

1. I don't think anyone really can. It's my understanding that many Europeans citizens and some politicians are really critical and unhappy, and quite angry.

2. Rational Factors and hidden agenda's;

a. At this moment it's only a principle- agreement, it needs to be ratified; b. this deal is only a piece of paper , like a memo, so who gives a shit, c. Tomorrow Trump will change everything again as he's unreliable, d. The political factions within Europe were too divided in their stance, and this wedge was used as leverage; e. EU wants USA defence fully committed in NATO as to face the other growing threats; f. Appeasement to avert a Tradewar and International Financial collapse, so they reckon the price of a collapse would exceed the loses ( Damage control); g Don't forget it's US citizens paying the Tariffs, not Europeans ; h. Furure commitments of investments in the US, mean absolutely nothing, as we hope that the Dems take control within the next year(s); I. Maybe Europe bought Trump for some symbolic gesture, and in the end, this will prove a smart decision. j. Likely, but an unknown, Trump made some concessions to Europe we know nothing about and isn't broadly communicated; k. At this moment, the US administration seems to be friends with Europe again, instead of treating Europe like an enemy.

Probably lots more can be said. These were just my 5 minutes take, today.

Maybe he's using future Ukraine support as a hostage over this. Or something else just to get his deal through.

One possible reason is they're just not very worried about their domestic industries suffering. Americans will have to pay extra to buy from Europe, which hurts Americans more than anyone, and that's it. It's a huge economy, and they have other foreign markets to work with, so that's probably not going to sink Volkswagen on it's own.

In Canada, if we took a similar deal, our local industries would implode. Anyone that produces anything here would suddenly have 1/10th the nearby market to competitively sell to AND American competition at home. I mean, in the long run we could figure out other businesses, but the short term impact would be apocalyptic.

Edit: And yes, they want to keep the US defence industry and budget on side, at least until Russia is less of a threat.

The answer is: Military

At the moment Europe is very much dependent on the US if there is really a bigger conflict on the horizon, and i bet Trump did not hesitate to play this card.

What metric are you using to measure the market? The US GDP is around 50% larger than the EU.

I'm sure there are compelling ways to make the case either way.