The German carmaker is already contending with a gross sales slowdown, excessive prices, and competitors from cheaper Chinese language opponents.
Volkswagen has warned towards the “dangerous financial affect” of tariffs that could possibly be launched by US President Donald Trump throughout his second time period in workplace.
The agency highlighted specific unease over levies on items coming from Mexico, the place Volkswagen holds a significant manufacturing unit.
“The Volkswagen Group is anxious in regards to the dangerous financial affect that proposed tariffs by the US administration could have on American shoppers and the worldwide automotive trade,” a VW spokesperson stated in an emailed assertion to Euronews.
Throughout his inaugural deal with on Monday, the brand new US president claimed that he would “tariff and tax international international locations to complement our residents” – reiterating messages delivered on the marketing campaign path.
Trump has proposed import duties of 25% on Mexico and Canada, in addition to 10% on international imports and 60% on Chinese language items.
Tariffs on Mexico – in addition to on Canada – may arrive on 1 February, in response to the US President.
That is even if Canada, the US and Mexico handle to solidify a trilateral free commerce deal throughout Trump’s first time period in workplace.
The brand new president believes that tariffs can be utilized to favour US items and subsequently develop the financial system, regardless of consultants’ fears that additional levies will merely increase costs for American consumers.
Trump is not VW’s solely risk
Volkswagen’s feedback come because the automotive producer is already contending with a sequence of different challenges, hitting its monetary margins.
Powerful financial situations have brought on gross sales to hunch in main markets, whereas the agency is being undercut by cheaper Chinese language opponents.
By way of the transition to electrical automobiles, Volkswagen can be lagging behind – not helped by the German authorities’s resolution to scrap purchaser subsidies.
The automotive large threatened plant closures in its residence nation final 12 months, though retracted the proposal in December.
Operations in Mexico and the US
Throughout the pond, Volkswagen’s Puebla manufacturing unit is Mexico’s largest and certainly one of VW’s greatest websites.
The manufacturing unit made almost 350,000 automobiles in 2023, all for export to the US.
In response to Stifel analysts cited by Reuters, 65% of the automobiles that Volkswagen sells within the US would now not be aggressive if duties have been added to Mexican imports.
To underline the significance of its US websites, Volkswagen stated it was making whole investments of greater than $10bn (€9.7bn) within the nation.
The funding will likely be shared between its Chattanooga plant in Tennessee and a three way partnership with EV startup Rivian.
The partnership with Rivian is meant to supply VW with cutting-edge electrical structure and software program for EVs.
Within the emailed assertion to Euronews, Volkswagen said that it “seems ahead to persevering with its longstanding and constructive partnership with the US administration”.
A spokesperson stated: “As a worldwide firm with deep roots in america, we worth collaboration and open dialogue.”