Volkswagen has cautioned that the US administration’s proposed tariffs on imports from Mexico might have a “dangerous financial influence” on each American shoppers and the worldwide automotive business.
It comes after President Donald Trump indicated this week that he intends to impose tariffs as excessive as 25 per cent on autos from Mexico and Canada by 1 February, citing issues over migration.
Volkswagen operates a big plant in Puebla, Mexico — its largest web site exterior Europe — which constructed practically 350,000 autos in 2023, primarily for export to america. The German carmaker criticised the mooted protectionist transfer, saying:
“The Volkswagen Group is worried concerning the dangerous financial influence that proposed tariffs by the US administration could have on American shoppers and the worldwide automotive business. We stay a robust advocate without spending a dime and honest commerce.”
The corporate has invested greater than $10 billion within the US market, sustaining that “open markets have been a driving drive behind world financial development and prosperity”. Analysts at Stifel beforehand warned that round 65 per cent of Volkswagen’s US gross sales are made up of automobiles produced in Mexico, suggesting that if new tariffs are enforced, the model might turn into uncompetitive and even withdraw from the American market altogether.
Volkswagen shares eased by €0.50, or 0.5 per cent, to €96.35, whereas its rival Stellantis slipped €0.17, or 1.3 per cent, to €12.68. Stellantis, which imports practically 40 per cent of its US-sold autos from Mexico and Canada, has expressed help for enhancing US-based manufacturing. The group’s chairman, John Elkann, reportedly spent 4 days assembly Trump and senior officers within the new administration earlier this month.
The potential introduction of tariffs threatens to disrupt the US-Mexico-Canada commerce settlement (USMCA), the successor to the North American Free Commerce Settlement (Nafta). Each Canada and Mexico have vowed to retaliate with counter-tariffs if Trump goes forward along with his plan, creating the prospect of a brand new commerce battle. The Canadian greenback and Mexican peso every weakened towards the US greenback by mid-morning on the information, falling 0.9 per cent and 1.2 per cent respectively.