Volkswagen ID.7 electrical vehicles 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 automobiles made in North America can be exempt from U.S. President Donald Trump’s newly rolled out 25% tariffs, whereas BMW says it is going to 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 automobiles 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 automobiles with the U.S., with the class accounting for 41% of its exports to America.
Nonetheless, a number of the area’s automaking giants might be able to — a minimum of quickly — skirt across the new duties. Final week, the White Home granted a one-month tariff delay to automakers whose automobiles adjust to the United States-Mexico-Canada Settlement, or USMCA — a commerce deal between the three nations. Beneath its phrases, if a minimum of 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 automobiles meet the USMCA guidelines of origin and are exempted from the 25% tariffs,” a Volkswagen spokesperson mentioned in an emailed assertion.
“As a world automotive producer, we’re monitoring developments in North America very carefully and assessing any potential results on the automotive business and our firm because of the tariffs introduced for the USA, Canada, Mexico and the European Union.”
Except for its flagship model, Volkswagen owns numerous main car manufacturers together with Skoda, Audi and Bentley.
“We stand able to work with policymakers to search out options that assist the U.S. business whereas preserving financial alternatives for employees, companies and customers alike,” the auto big informed CNBC.
In the meantime, Stellantis — identified for its Jeep and Dodge automobiles — thanked Trump for granting the USMCA exemption in an announcement on Friday and pledged to develop its U.S. operations. The carmaker was one of many main corporations 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 vehicles and create lasting American jobs,” the agency mentioned on the time. “We stay up for working with him and his group.”
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 sophisticated’ state of affairs
Then again, German autos big BMW mentioned that, if the USMCA regulation stays, it will likely be topic to levies.
“The present state of affairs concerning the introduction of import tariffs in North America may be very risky and sophisticated,” BMW mentioned 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 corporations.”
“Our place stays unchanged: Free commerce, which has at all times been a guideline for the BMW Group, is of immense significance worldwide,” the corporate added. “It is likely one of the most vital drivers of development and progress. Tariffs, then again, hinder free commerce, decelerate innovation, and set a adverse spiral in movement. Ultimately, they’re detrimental to clients, making merchandise costlier and fewer revolutionary.”
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 mentioned. “The incremental tariff ought to, all else equal, end in an EBIT affect of ~€400m (earlier than value will increase), comparatively small in a bunch context (4%). The larger potential risk for BMW and the opposite German OEMs is the potential tariff on EU-made vehicles, which is going through a deadline on 2 April.”
Trump’s rolls-outs and reversals of tariffs geared toward Canada and Mexico — the place many world carmakers have manufacturing vegetation — has sparked risky commerce of regional autos shares. Final month, after the president introduced a 30-day delay to the levies, world markets noticed a main sell-off of autos shares, with valuations falling sharply.
