Volkswagen Group Proposes Domestic Adjustments During Tariff Bargaining in the United States
Volkswagen Group Faces Challenges Amid US Tariffs
Volkswagen Group, the German automotive giant, is planning to invest heavily in the US, but recent trade tensions between the US and the EU have posed significant challenges for the company.
In April, the Audi division of Volkswagen Group suspended exports to the US from both Europe and Mexico. This decision was likely a response to the US's steel and aluminium tariffs, which have impacted the automotive industry globally. The full-year margin forecast for Audi and Porsche divisions was lowered from 5.5-6.5% to 4-5% due to the impact of these tariffs. As a result, Audi and Porsche divisions experienced profit drops of about 64% and 91% respectively.
The US tariffs caused a €1.3 billion ($1.5bn) hit to Volkswagen Group's operating profit in the first half of 2025. The CEO of Volkswagen Group, Oliver Blume, criticized the US-EU deal as unfair and distorting competition in Europe. However, no specific information is available about which US government officials or representatives spoke with Mr. Blume regarding a possible agreement.
In an attempt to counter the US tariffs, a proposal was made to introduce trade countermeasures against the US' steel and aluminium tariffs. The European Commission put a pause on the action in early August, but the status of negotiations with the US administration remains unclear. Volkswagen Group has been contacted for comment regarding the current status of these negotiations.
Volkswagen Group recently took part in a meeting with the European Commission alongside representatives from BMW and Stellantis. The goal of the meeting was to discuss the ongoing trade dispute and potential solutions. Despite the challenges, Volkswagen Group continues to plan for significant investments in the US, demonstrating their commitment to the market.
The ongoing trade dispute between the US and the EU has had a significant impact on the automotive industry, particularly for companies like Volkswagen Group. As negotiations continue, it remains to be seen how the situation will unfold and what the future holds for this global automotive giant.
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