Volkswagen Reports €1.3bn Loss Due to US Import Tariffs
The German automaker Volkswagen has stated that import tariffs imposed by Donald Trump’s administration cost it €1.3bn (£1.13bn) in the first half of the year. The company, which is reviewing plans to reduce its workforce by 35,000 by 2030, cited the tariffs as a major factor in its lower operating results.
Volkswagen has also adjusted its projected profit margin to between 4% and 5% for the year, assuming U.S. tariffs remain between 10% and the current 27.5%. The company owns brands such as Audi, Seat, Skoda, Lamborghini, Bentley, and commercial vehicle manufacturer Scania.
The financial impact reinforces calls by German officials for Trump to agree to a tariff deal with concessions for European automakers. Earlier this week, Stellantis, which produces Vauxhall vehicles, reported a €300m loss due to the tariffs. Similarly, Volvo, owned by a Chinese firm, suspended sales of certain models in the U.S. and saw a significant decline in revenue in the second quarter.
According to the VDA automotive association, German car exports to the U.S. dropped by 13% in April and 25% in May compared to the same months last year, with only 64,300 vehicles shipped during the two-month period. Before Trump's return to office, the U.S. imposed a 2.5% tariff on European cars, while the EU had a 10% duty on American imports.
Håkan Samuelsson, Volvo’s chief executive, recently urged the EU to eliminate its 10% tariff, calling it unnecessary to facilitate negotiations with the U.S. However, the EU is nearing a broader agreement with the U.S. that would set a 15% tariff on most goods, excluding special exemptions for the automotive sector, if finalized before Trump’s 1 August deadline.
While EU officials believe a deal is possible, Trump is not expected to sign any immediate orders as he begins a private visit to his golf resorts in Scotland.
In a separate development, Puma’s shares fell over 18% on Friday after warning that U.S. trade tariffs could reduce its gross profit by €80m this year, leading to an adjusted loss before interest and taxes. Many sportswear companies face increased costs due to reliance on manufacturing in China, Vietnam, Cambodia, and Bangladesh.
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