Volkswagen AG plans to add import fees to the sticker prices of its vehicles shipped into the US, indicating Donald Trump’s 25% auto tariffs will have an immediate effect on Europe’s biggest carmaker.
VW sent US dealers a memo informing them of the fees, as well as moves to temporarily halt rail shipments of vehicles from Mexico and hold at port cars shipped from Europe, Automotive News reported. A company spokesperson confirmed the existence of the memo and declined to comment on its content.
Germany’s carmakers are among the most affected by Trump’s higher levies on auto imports. Robust demand for more profitable sport utility vehicles and US consumers’ slower shift to electric vehicles make it a lucrative market for the likes of Mercedes-Benz Group AG and Porsche AG.
Trump’s tariffs represent a “fundamental turning point in trade policy,” said Hildegard Müller, head of Germany’s auto lobby VDA. The move will only produce losers, including in the US, where consumers will be hit by “rising inflation and a reduced choice of products.”
Trump’s 25% levy, which took effect Thursday, already has rattled the auto industry, with buyers rushing to lock in deals and shares slumping on fears of soaring costs. Mercedes is considering withdrawing lower-margin imported models like the GLA small SUV in the US, Bloomberg News reported earlier this week.
German automotive shares slumped Thursday, with Volkswagen and Mercedes dropping more than 3% early in intraday trading. BMW declined 0.7% as of 10:49 a.m. in Frankfurt.
Germany’s outgoing economy minister, Robert Habeck, welcomed the European Commission’s push for talks with the Trump administration, but warned of a “clear and decisive response” if the US rejects a compromise. “The US tariff mania could trigger a spiral that could also drag countries into recession and cause massive damage worldwide,” Habeck said.
Volkswagen operates a factory in Tennessee where it makes the electric ID.4 and larger Atlas SUVs. Models including the ID. Buzz van and Golf hatchbacks are imported from Europe, while Tiguan and Taos SUVs and Jetta compacts are shipped in from Mexico.
The German manufacturer has long sought to grow in the lucrative North American market, where it generated around a fifth of its revenue last year. The company posted a 7% increase in deliveries in the region in 2024, helping to soften the blow from slumping sales in China.
The tariff pain isn’t restricted to Germany. Italy’s Ferrari NV last week said it plans to raise prices for some of its cars in the US by as much as 10%, a move that could raise sticker prices by tens of thousands of dollars.
In the UK — which exported almost 80% of the cars it produced last year — the auto trade lobby warned that American consumers likely will now have to pay more for Range Rovers, Minis, Bentleys and Aston Martins.
“These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands,” said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders. “UK producers may have to review output in the face of constrained demand.”
By Bloomberg
