Volkswagen warns that President Donald Trump's Mexican import tariffs will hurt customers across America as well as worldwide automakers significantly. As the President prepares to start tariffs at 25% in February 1st the entire auto sector fears rising challenges.
Volkswagen issued a statement to Reuters revealing strong concerns about how the tariffs might affect different sectors. As a leading automotive group Volkswagen Group warns about the destructive effect proposed tariffs will have on American buyers and worldwide auto producers. Our company promotes teamwork and active conversations with the US administration while keeping our established partnership strong.
Also Read | German carmakers warn Trump tariffs would harm US consumers and auto industry
Volkswagen runs Mexico's largest auto factory in Puebla where the facility produced almost 350,000 vehicles during 2023. They crafted Jetta, Tiguan, and Taos vehicles mostly for export to the United States. Stifel analysts predict Volkswagen will face significant problems with 65% of their US vehicle sales if Mexico imports get taxed.
Volkswagen confronts multiple challenges including mounting operational expenses and a Chinese automaker rival while transitioning to electric vehicles facing these new regulations. Shares of Volkswagen decreased 0.8% on Tuesday due to market uncertainty.
Volkswagen displayed its ongoing U.S. investment by disclosing its USD 10 billion spending plan that benefits both its Chattanooga Tennessee operations and its joint venture with Rivian to develop electric vehicles.
Also Read | Chinese automakers eye Volkswagen factories in Germany
As president of VDA Hildegard Müller pointed out that business partnerships help industries overcome their pressing problems. Müller stressed economic power as the strongest solution to handle present-day difficulties.
Volkswagen is reportedly engaging closely with the Trump administration to address the tariff issue. BMW has also weighed in, highlighting its manufacturing presence in South Carolina. The automaker noted it assembles more vehicles in the U.S. than it sells domestically and exports more vehicles from the U.S. than it imports, underscoring the importance of cross-border trade.