Porsche Drops Truth Bomb on U.S. Production Plans Amid Tariff Negotiations
Porsche Drops Truth Bomb on U.S. Production Plans Amid Tariff Negotiations originally appeared on Autoblog.
Porsche has dismissed a Bloomberg report stating that the automaker is considering moving some of its final assembly to the U.S. to ease tariff impacts. The initial report referenced Porsche possibly installing interior components or fitting tires in the U.S., where it currently has no production presence. Instead, Porsche restated its stance from April that U.S. production localization doesn't make financial sense due to its relatively low sales volume.
In April, Porsche CFO Jochen Breckner added that U.S. localization wouldn't occur even if the automaker partnered with another brand from its parent company, Volkswagen Group. Still, Volkswagen Group is seriously considering expanding its U.S. manufacturing footprint with another one of its subsidiaries, Audi. An Audi spokesperson reportedly told Automotive News 'We want to increase our presence in the U.S.,' while adding that the company is confident it'll finalize specific details with Volkswagen Group by the year's end. Volkswagen currently operates one U.S. plant in Chattanooga, Tennessee, and its competitors, BMW and Mercedes-Benz, have factories in Spartanburg, South Carolina, and Tuscaloosa, Alabama, respectively.
Porsche's problems in 2025 aren't limited to U.S. tariffs. During Q1, the brand's sales fell 42% in China. Four years ago, Porsche achieved its highest annual sales in China, at 95,671. Chinese consumers are gravitating away from Porsche and turning to newer companies like Xiaomi and BYD's high-end Yangwang brand. Xiaomi's first model, the electric SU7 sport sedan, thrived in China with its Porsche-inspired styling available at a lower price. The $72,591 Xiaomi SU7 Ultra variant with 1,548 horsepower received about 10,000 pre-orders in two hours, slightly exceeding Porsche's Q1 China sales this year. Porsche CEO Oliver Blume said, 'We don't care about the volume,' and that the company was more concerned with keeping its prices at a high level, 'appropriate for Porsche,' Reuters reports. However, Blume also told Porsche investors at the company's annual conference on May 21: 'Our market in China has literally collapsed,' according to The New York Times.
Last month, Porsche delayed its all-electric versions of the 718 Boxster and Cayman for the second time, citing difficulty sourcing the models' high-performance battery cells. In April, Porsche said drivers could expect the two electric vehicles (EVs) in 2026, but its most recent delay pushes the release to at least 2027. Porsche has scaled back its financial outlook for 2025 by about 2 billion euros ($2.28 billion), with an expected profit margin range decline of between 6.5% and 8.5% from 10% to 12%.
Oliver Blume's desire to maintain Porsche's prices and keep the company's production out of the U.S. makes it likely that the automaker will raise its lineup's costs. Blume, who is also Volkswagen Group's CEO, confirmed he spoke directly to the U.S. commerce secretary, Howard Lutnick, in Washington, D.C., but agreed with Lutnick to keep the conversation's details confidential. However, Porsche is far from the only company that could increase prices because of tariffs, and some of Volkswagen Group's other subsidiaries, such as Audi, can ease tariff impacts with increased U.S. manufacturing. Porsche's approach is more likely to hurt the company in its second-largest market, China, as the country's electric vehicle price war heats up.
Porsche Drops Truth Bomb on U.S. Production Plans Amid Tariff Negotiations first appeared on Autoblog on Jun 11, 2025
This story was originally reported by Autoblog on Jun 11, 2025, where it first appeared.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New York Post
36 minutes ago
- New York Post
China-backed firms in talks to join stalled $19B Panama ports deal: report
Several China state-backed firms – including the country's largest shipping company – are reportedly in talks to join a stalled $19 billion deal for 43 global ports, including two along the Panama Canal. China's Cosco Shipping Corp. has held discussions about partnering with a global consortium headed by Italian billionaire Gianluigi Aponte's Terminal Investment Ltd., as well as US asset manager BlackRock and its Global Infrastructure Partners unit, sources familiar with the matter told Bloomberg. The move comes after Beijing's fierce opposition has jeopardized a deal that would hand over control of the ports owned by Hong Kong business magnate Li Ka-Shing to TiL and BlackRock, the world's largest asset manager led by Larry Fink. 3 China's largest shipping company is reportedly in talks to join a group of investors in a massive ports deal including two along the Panama Canal. REUTERS President Trump had touted the sale of the ports as a national security win after demanding the US 'take back' the Panama Canal and eliminate Chinese influence over the critical shipping lane. The inclusion of Cosco and other China state-backed companies emerged as a way to nudge the deal forward after intense trade talks between US officials and their Beijing counterparts over tariffs in Switzerland last month, sources told Bloomberg. The consortium is staring down a deadline in late July after a 145-day period for talks on the ports deal expires, and have already missed an initial goal of signing an agreement by early April. Aponte's family-run business – Mediterranean Shipping Company, which owns TiL – has emerged as the lead investor, though BlackRock is notably expected to take over the two Panama ports included in the sale. The deal is expected to crown Aponte's MSC as the world's largest terminal operator after acquiring the ports from Li's CK Hutchison Holdings. China has steadfastly opposed the deal over concerns it could hinder its global trade and shipping operations. 3 Hong Kong business magnate Li Ka-Shing is the senior adviser for ports operator CK Hutchison Holdings. Bloomberg via Getty Images Talks are ongoing and terms of the deal have not been finalized, sources told Bloomberg. BlackRock declined to comment. Cosco Shipping and TiL did not immediately respond to requests for comment. The White House and CK Hutchinson did not immediately respond to The Post's request for comment. The canal, which was finished by US engineers, was handed back to Panama between 1977 and 1999 under a Jimmy Carter-era treaty establishing permanent neutrality. 3 Italian billionaire Gianluigi Aponte owns Mediterranean Shipping Company. AFP via Getty Images The head of the operator of the Panama Canal has warned that the deal could threaten its commitment to neutrality. 'There is a potential risk of capacity concentration if the deal comes the way it is structured as we understand right now,' Ricaurte Vasquez Morales, administrator of the Panama Canal, told the Financial Times in an interview published this week. 'If there is a significant level of concentration on terminal operators belonging to an integrated or one single shipping company, it will be at the expense of Panama's competitiveness in the market and inconsistent with neutrality.'
Yahoo
an hour ago
- Yahoo
Trump Touts Higher Duty Rate for Chinese Imports Under New Trade Deal
Hours after his cabinet announced that the United States would resume its previously agreed upon trade truce with China, President Donald Trump stoked confusion by revealing a new tariff rate of 55 percent for the sourcing superpower. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, along with U.S. Trade Representative Ambassador Jamieson Greer, traveled to London this week to sit down with Chinese trade officials following weeks of trade tensions and the crumbling of a provisional agreement solidified in Switzerland in mid-May. More from Sourcing Journal China-to-US Freight Rates 'No Longer Surging'-Is it All Downhill from Here? Trump Likely to Extend Tariff Pause as Negotiations Take Shape, Treasury Secretary Says China and US Return to Terms of May Trade Truce At the end of negotiations on Tuesday, Lutnick indicated that both sides had agreed to 'implement the Geneva consensus' upon approval from Trump and Chinese President Xi Jinping. That deal centered on the deferral of reciprocal duties—lowered on the U.S. side to 30 percent and China's side to 10 percent—for three months. But by Wednesday morning, Trump had Truthed new information about the deal, saying that China will now pay a 55-percent duty rate, while the U.S. will still be subject to 10-percent tariffs on any goods imported into China. An all-caps missive said the deal with China was done, though subject to final approval by Xi and himself. 'RELATIONSHIP IS EXCELLENT!' he wrote. The president did not elucidate the reasoning for the 55-percent rate, which appears on its face to be a a 25-percent increase from the May agreement. But a White House spokesperson, who spoke to The Guardian anonymously, said the rate includes Trump's 10-percent universal baseline tariffs, a previous 20-percent punitive duty for fentanyl trafficking and an existing 25-percent tariff on China-made goods. 'A reported 55 percent tariff on our largest supplier of American apparel and footwear, stacked on top of already high MFN and Section 301 rates is not a win for America,' Steve Lamar, president and CEO of the American Apparel and Footwear Association, said in a statement. 'We're closely watching for more details, but the reality is this: nearly all clothes and shoes sold in the U.S. are now subject to elevated tariff rates,' he added. 'These costs will hit American families hard especially as they get ready for back-to-school shopping and the holiday seasons. New trade deals that bring lower tariffs can't come soon enough.' At a budget meeting with the House Ways and Means Committee on Wednesday, Secretary Bessent seemed to hint that the China deal may be shakier than the president indicated in his post on Truth Social. 'China has a singular opportunity to stabilize its economy by shifting away from excess production towards greater consumption. But the country needs to be a reliable partner in trade negotiations,' he told the Committee. 'If China will course-correct by upholding its end of the initial trade agreement we outlined in Geneva last month, then a big, beautiful rebalancing of the world's two largest economies is possible.' Footwear Distributors and Retailers of America senior vice president Andy Polk told Sourcing Journal that he believes this week's trade talks represent 'more political marketing than anything else.' 'It is positive that high level talks continue in hopes of getting us closer to a tariff end-game,' he said. 'However, there doesn't seem to be anything rally new coming out of these talks, just a climb down from threats.' Calling the president's tariff calculations 'very confusing,' Polk said he believes the 55-percent rate includes the Section 301 duties from his first term, the 20-percent fentanyl-related tariffs and the 10-percent baseline duties for all trade partners, among others. 'It is not a new tariff rate he is adding, it just seems to be fuzzy tariff math on his part.''Perhaps these steps forward will continue to unlock other issues to reduce this trade impasse, but I am not sure they are tackling the big items in a speed we need,' Polk said. 'We need a real deal that reduces tariffs back to reasonable levels quickly, and one that stabilizes them so shoe companies aren't jolted around constantly.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Trump Likely to Extend Tariff Pause as Negotiations Take Shape, Treasury Secretary Says
U.S. Treasury Secretary Scott Bessent said it's 'highly likely' that President Donald Trump will extend his July 9 reciprocal tariff deadline to continue negotiations with trade partners. Following two days of discussions in London with Chinese officials which resulted in a patched-up trade truce, Bessent testified in front of the House Ways and Means Committee on Wednesday, telling members of Congress that the administration is 'working toward deals' with '18 important trading partners' or blocs, in the case of the European Union. More from Sourcing Journal China-to-US Freight Rates 'No Longer Surging'-Is it All Downhill from Here? DHL Makes $570 Million Splash in the Middle East Trump Touts Higher Duty Rate for Chinese Imports Under New Trade Deal Those deals may take more time to complete, Bessent hinted, saying that countries that are 'negotiating in good faith' could see extensions on the tariff deadline. 'If someone is not negotiating, then we will not,' he added. Just one month remains until the double-digit 'Liberation Day' duties that the president announced on April 2 will go into effect. With negotiations between the Washington and Beijing reaching an apparent consensus, Commerce Secretary Howard Lutnick said trade-focused members of Trump's team, including himself, Bessent, and U.S. Trade Representative (USTR) Ambassador Jamieson Greer, will now be focused on other deals. 'Our teams are moving them forward… we're going to be focused starting today,' he said during an interview on CNBC, noting that the U.S. is in 'good shape with a lot of countries' and could see 'deal after deal' as soon as next week. 'We've got lots of them in the hopper. We just want to make sure they're the best deal we possibly can make. We don't want to rush,' he said. Lutnick confirmed that dealmaking with the E.U. has been tense. 'Europe was more than thorny,' he told the news outlet, saying, 'they just weren't really engaging.' In late May, Trump threatened the E.U. with sweeping 50-percent tariffs—significantly higher than the 20 percent announced in April—saying leaders had been 'difficult to deal with' and that the negotiations were 'going nowhere.' The president accused the trade bloc of maintaining high trade barriers and value-added taxes (VAT) on American goods, among other complaints. At the time, he said the heightened duty rate would help address the trade deficit between Europe and the U.S., which totaled $235 billion in 2024, according to USTR data. Lutnick echoed Trump's sentiments on Wednesday, telling CNBC that the sheer breadth of the negotiations, which will result in trade rules that apply to 27 European countries, makes it 'tough' to come to a resolution. Within the scope of the administration's trade deal agenda, 'Europe will be probably the very, very end,' he said. Lutnick also commented on recent legal setbacks that the president's tariff regime has suffered, referencing a ruling by a Court of International Trade that the duties, applied under the International Emergency Economic Powers Act (IEEPA), were illegal. A federal appeals court granted a stay on that decision as it reviews the cases brought against the president, and the tariffs are allowed to move forward—for now. The Commerce Secretary said 'ultimately, it's not going to matter' what the courts rule because the president has a number of executive authorities and avenues to pursue to execute his tariff plan.
