BMW, Mercedes-Benz and Volkswagen are reportedly in Washington for a possible relief from the export tariffs by heavily investing in the U.S. Sources close to Reuters have said three German automobile manufacturers are in talks with the U.S. Department of Commerce are hoping to strike a deal in June. The catch here is that the three companies will have to commit to the U.S. market and pledge substantial investments.
According to Reuters, the proposed measures would allow German automakers to earn credits for vehicles exported from the United States. These credits could then be used to offset existing tariffs. U.S. President Donald Trump had recently announced that 25% export tariffs on car imports will be imposed from July 9. The tariffs will create a dent in the car sales for three companies, as the United States is the biggest export market for them.
Volkswagen, Mercedes-Benz and BMW declined to comment to Reuters on any talks with the U.S. government. The carmakers previously said they were holding talks with the U.S. government over the tariff issue.
A glimmer of hope amid uncertainty
The shares of German automakers rose after the Reuters news report suggested potential easing of U.S. tariffs. BMW led the gains with a 3.1% increase, followed by Volkswagen at 2.2% and Mercedes-Benz at 1.8%.
The boost comes as the automakers face mounting challenges, including a prolonged slowdown in German industrial output and intensifying global competition. Executives from BMW and Audi, a subsidiary of Volkswagen, have recently hinted at possible progress on the tariff issue in the coming months.
In response to the trade tensions, Mercedes-Benz is shifting strategy by expanding production of its GLC SUV for the North American market at its plant in Tuscaloosa, Alabama, a move aimed at mitigating the impact of U.S. import tariffs and strengthening its local manufacturing footprint.
