Volkswagen Chief Blume Strikes Accord with Trump
VW CEO Oliver Blume in Talks with U.S. to Secure Tariff Exemption
Volkswagen is negotiating with the U.S. government to secure exemption from the 25% import levy on vehicles, aiming to reduce or eliminate the tariff through substantial investments in the country. According to Oliver Blume, CEO of Volkswagen and subsidiary Porsche, the talks have been "fair" and "constructive."
The discussions, which involve regular contact with the U.S. Trade Minister, aim to ease the impact of the tariffs that were implemented earlier this year. VW is banking on its commitment to investing in the U.S. as a bargaining chip to secure favorable tariff terms. The company employs over 20,000 people directly and over 55,000 indirectly in the country, and has a partnership with U.S. company Rivian.
Currently, the timeline for reaching a decision remains uncertain. The U.S. trade environment is subject to change, influenced by factors like court rulings and shifting political policies. Any agreement would need to respect the legal framework of trade negotiations, which are typically conducted at the government level rather than company-to-government.
The German carmaker, along with BMW and Mercedes-Benz, is said to be discussing possible tariff easements with the U.S. Trade Ministry. It's been reported that the proposed mechanism involves offsetting imports with U.S. exports. A decision is hoped for in June, but specific details about the proposed terms or concessions are not yet publicly disclosed.
Blume sees his recently criticized dual role as not set in stone. He says, "The function of CEO of Volkswagen and Porsche is not set in stone for eternity. The time may come when we decide to focus on one of the two roles."
- Volkswagen's negotiations with the U.S. government, which aim to secure exemption from tariffs, are influenced by their employment policy, as they employ thousands of people directly and indirectly in the country.
- In order to secure favorable tariff terms, Volkswagen is also considering substantial investments in the U.S., a strategy that falls under their overall business policy and investing in the country.
- The process of negotiating tariff terms involves policy-and-legislation and politics, as it requires the company to respect the legal framework of trade negotiations that are typically conducted at the government level.
