Volkswagen ID.7 electrical automobiles are seen on the Volkswagen (VW) electrical fleet lead plant in Emden, Germany, Feb. 18, 2025.
Carmen Jaspersen | Reuters
Automakers Volkswagen and Stellantis have confirmed that their autos made in North America shall be exempt from U.S. President Donald Trump‘s newly rolled out 25% tariffs, whereas BMW says it should face levies, as European automobile producers grapple with new commerce guidelines.
The newly returned White Home chief has lengthy been threatening to slap tariffs on main U.S. buying and selling companions, together with Canada, Mexico and the EU. Final week, new duties on items from Mexico, Canada and China got here into impact.
The specter of import tariffs has raised alarm bells in Europe, as autos and equipment are the European Union’s greatest exports to the USA. In 2023, the EU had a 102 billion euro ($110.6 billion) commerce surplus in equipment and autos with the U.S., with the class accounting for 41% of its exports to America.
Nevertheless, among the area’s automaking giants could possibly — no less than quickly — skirt across the new duties. Final week, the White Home granted a one-month tariff delay to automakers whose autos adjust to the United States-Mexico-Canada Settlement, or USMCA — a commerce deal between the three international locations. Below its phrases, if no less than 75% of a car’s elements originate from North America, it may be exempted from new tariffs imposed on imports from Canada and Mexico.
“Our North American assembled VW-brand autos meet the USMCA guidelines of origin and are exempted from the 25% tariffs,” a Volkswagen spokesperson stated in an emailed assertion.
“As a worldwide automotive producer, we’re monitoring developments in North America very intently and assessing any potential results on the automotive business and our firm on account of the tariffs introduced for the USA, Canada, Mexico and the European Union.”
Except for its flagship model, Volkswagen owns varied main car manufacturers together with Skoda, Audi and Bentley.
“We stand able to work with policymakers to seek out options that help the U.S. business whereas preserving financial alternatives for employees, companies and shoppers alike,” the auto large advised CNBC.
In the meantime, Stellantis — identified for its Jeep and Dodge autos — thanked Trump for granting the USMCA exemption in a press release on Friday and pledged to develop its U.S. operations. The carmaker was one of many main firms given a one-month exemption from the levies, forward of so-called reciprocal tariffs coming into impact on April 2.
“We share the President’s goal to construct extra American automobiles and create lasting American jobs,” the agency stated on the time. “We stay up for working with him and his workforce.”
Shares of Stellantis, which has a number of vegetation in Mexico, popped after Trump introduced the exemptions for carmakers final week. The inventory was up greater than 2% on Monday afternoon in London.
‘Risky and complicated’ state of affairs
Alternatively, German auto large BMW stated that, if the USMCA regulation stays, it will likely be topic to levies.
“The present state of affairs relating to the introduction of import tariffs in North America may be very unstable and complicated,” BMW stated in an emailed assertion. “The linkage of import tariff to compliance with USMCA guidelines is the latest announcement. If this regulation remained in impact, the BMW Group can be one of many affected firms.”
“Our place stays unchanged: Free commerce, which has all the time been a tenet for the BMW Group, is of immense significance worldwide,” the corporate added. “It is likely one of the most vital drivers of progress and progress. Tariffs, then again, hinder free commerce, decelerate innovation, and set a destructive spiral in movement. Ultimately, they’re detrimental to clients, making merchandise costlier and fewer progressive.”
In a word to shoppers on Friday, UBS analysts estimated that 10% of U.S. unit gross sales for BMW had been imported from Mexico at a reasonably low price ticket, largely for the corporate’s 2 and three sequence fashions.
“It’s value highlighting that BMW’s U.S. imports from Mexico had been already topic to a tariff earlier than,” they stated. “The incremental tariff ought to, all else equal, lead to an EBIT affect of ~€400m (earlier than value will increase), comparatively small in a bunch context (4%). The larger potential menace for BMW and the opposite German OEMs is the potential tariff on EU-made automobiles, which is going through a deadline on 2 April.”
Trump’s rollouts and reversals of tariffs geared toward Canada and Mexico — the place many world carmakers have manufacturing vegetation — has sparked unstable commerce of regional auto shares. Final month, after the president introduced a 30-day delay to the levies, world markets noticed a main sell-off of auto shares, with valuations falling sharply.
