Volkswagen has cautioned that the US administration’s proposed tariffs on imports from Mexico might have a “harmful economic impact” 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 automobiles from Mexico and Canada by 1 February, citing considerations over migration.
Volkswagen operates a big plant in Puebla, Mexico — its largest website outdoors Europe — which constructed almost 350,000 automobiles in 2023, primarily for export to the USA. The German carmaker criticised the mooted protectionist transfer, saying:
“The Volkswagen Group is concerned about the harmful economic impact that proposed tariffs by the US administration will have on American consumers and the international automotive industry. We remain a strong advocate for free and fair trade.”
The corporate has invested greater than $10 billion within the US market, sustaining that “open markets have been a driving force behind global economic growth 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 change 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 almost 40 per cent of its US-sold automobiles from Mexico and Canada, has expressed assist for reinforcing 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 together with his plan, creating the prospect of a brand new commerce struggle. The Canadian greenback and Mexican peso every weakened in opposition to the US greenback by mid-morning on the information, falling 0.9 per cent and 1.2 per cent respectively.
