Volkswagen is edging closer to securing a trade agreement with the United States as it seeks relief from tariffs that have already cost the German carmaker several billion euros. The company, which owns brands including Audi, Seat, and Porsche, has been under pressure since Donald Trump’s administration imposed steep levies on European car imports earlier this year.
Chief executive Oliver Blume confirmed that while the US has agreed to reduce tariffs from 27.5% to 15%, the new rate would still be a significant burden. To offset the impact, Volkswagen has pledged major investments in the US in hopes of negotiating a lower tariff level through a separate deal.
Blume noted that Volkswagen is considering localizing Audi production in America and boosting exports from its US facilities. He emphasized that Porsche, the group’s luxury brand, is being hit hardest, squeezed between high tariffs and weakening demand in China. With most Porsche cars sold in the US manufactured in Germany, the brand remains especially vulnerable.
At a trade show in Munich, Volkswagen also unveiled a concept for a small, affordable electric car, aiming to capture a fifth of Europe’s compact EV market. The company stressed its vision of “e-mobility for everyone” as it looks to balance profitability with wider accessibility in the growing electric vehicle segment.
The broader auto industry continues to feel the shockwaves of Trump’s trade war. Several European carmakers, including BMW and Jaguar Land Rover, are also facing declining sales and restructuring challenges linked to the tariff disputes.
