Volkswagen CEO Blome proposes a deal to President Trump, offering tariff exemptions for the automaker's vehicles.
German Automakers Seek Tariff Relief Deal with US Trade Ministry
Volkswagen, BMW, and Mercedes-Benz are in negotiations with the US Trade Ministry to ease the impact of the 25% import tariffs on European-built vehicles. The proposed tariff relief deal aims to offset some of the import duties through a credit mechanism that allows increased US production and exports, according to reports from Reuters.
In an interview with the "Süddeutsche Zeitung," VW CEO Oliver Blume stated that they have been in regular contact with the US Trade Minister and, ultimately, the US President. Blume emphasized their commitment to investing in the US, citing over 20,000 direct employees and 55,000 indirect employees in the country. He mentioned cars, school buses, trucks, and a partnership with US company Rivian as part of their US operations.
According to insiders, the automakers are hoping for an agreement by the US government with the individual companies in June. The goal is to finalize a deal by early July 2025. Each brand already has significant US production facilities, but the bulk of their high-margin vehicles are still imported from Europe.
To mitigate financial losses caused by the tariffs, the companies are planning to invest between $4–6 billion in expanding their US manufacturing operations over the next five years. This investment would focus on new production lines, especially for electric and hybrid vehicles, as well as enhancing supply chains to increase local sourcing of components. The investments are expected to create 8,000 to 10,000 new jobs across the southern United States.
Specific plans from each company include BMW exploring a new electric vehicle assembly line at its Spartanburg plant, Mercedes-Benz increasing annual vehicle output by 50,000 units at its Alabama facility, and Volkswagen considering establishing a battery module assembly plant near its Tennessee factory.
This deal aims to boost US manufacturing presence and job growth in the automotive sector while helping the German automakers cope with financial losses caused by the tariffs. The announcement of these talks has already positively influenced the stock prices of all three companies.
- In light of the negotiations with the US Trade Ministry, the community policy of German Automakers, including Volkswagen, BMW, and Mercedes-Benz, includes prioritizing tariff relief to minimize financial losses from import duties.
- The employment policy of these automakers also aligns with this strategy, as they plan to invest $4–6 billion in expanding US manufacturing operations over the next five years, creating 8,000 to 10,000 new jobs, especially in the Southern United States.
- The finance and business sectors, as well as the automotive industry, will closely monitor the progress of these talks, given their potential impact on the economy, politics, and general-news, both in the US and Europe.
