With the 25% tariff US President Donald Trump levied on imports from Mexico and Canada, Volkswagen expects that its vehicles made in North America will most likely avoid them. However, other carmakers, including BMW, may not be exempt, according to a report by news agency Reuters.
This week, Trump granted one-month relief on tariffs to automakers that complied with the United States-Mexico-Canada Agreement (USMCA), after stating that duties would go into effect on March 4. The automakers that will eventually face tariffs remain unclear.
Vehicles made by Volkswagen in North America comply with USMCA, the report quoted a Volkswagen spokesperson. While BMW vehicles made in the US and Mexico do not comply with the agreement, a BMW spokesperson told Reuters, thereby increasing the potential for higher duties.
Nearly 10% of BMW products in the US are imported from Mexico and the company has opposed tariffs, the spokesperson stated.
“In the end, they are detrimental to customers, making products more expensive and less innovative,” the report quoted the company’s statement.
Other carmakers
Mazda expects that “for the next 30 days, under the USMCA, the Mexico-built Mazda3 and CX-30 will not be subject to the tariffs, but we are awaiting final and definitive guidance from the administration.”
Detroit had consistently lobbied for a tariff exemption for weeks and appreciated Trump’s announcement on temporary relief to automakers.
The Volkswagen Group will be impacted the most by Trump’s tariff threats on Mexico and Canada among German carmakers.
The Audi and Porsche brands under the Volkswagen Group have no manufacturing base in the US, and passenger car brand sales in the US consist mainly of imports from Mexican plants. Meanwhile, an under-construction battery cell plant in Canada was expected to deliver batteries to the US.
Mercedes claimed it had not yet checked the details of the 25% tariffs on Canada and Mexico and did not give an official response on its compliance with USMCA. Audi, with one plant in Mexico producing the Q5 SUV, did not officially comment on the agreement’s compliance. There was no official response from Nissan Motor as well.
Donald Trump’s 25% tariffs
On Monday, March 3, Donald Trump confirmed that tariffs on Canadian and Mexican imports will take effect on Tuesday, March 4.
“Tomorrow — tariffs 25% on Canada and 25% on Mexico. And that’ll start,” Trump told reporters in the Roosevelt Room. He stated that the tariffs are intended to pressure the two US neighbours into stepping up their fight against fentanyl trafficking into the United States.
