6 days ago
VW flags ‘massive' US investments and says tariff talks constructive
Volkswagen wants to make more big investments in the US, CEO Oliver Blume said in an interview with a German newspaper on Friday, adding tariff talks with the US government were "fair" and "constructive".
Several foreign companies have announced US investments in response to President Donald Trump's import tariffs, but German carmakers have been more cautious about committing more resources to what is their biggest export market.
Volkswagen's Audi brand, which has no production in the US, is planning to produce some models there, though the brand has said the plan pre-dates the Trump administration.
"So far we have had absolutely fair, constructive discussions," Blume told Sueddeutsche Zeitung. "I was in Washington myself and we have been in regular dialogue ever since."
Blume, who also leads Porsche AG as CEO, said Volkswagen's main contact in Washington was US commerce secretary Howard Lutnick, adding he had agreed to keep details of the discussions confidential.
Sources told Reuters last wee German carmakers including Volkswagen were in talks with Washington over a possible import tariff deal, seeking to use their US investments and exports as leverage to soften any blow.
Trump's trade war has cost companies more than $34bn (R608.69bn) in lost sales and higher costs, according to a Reuters analysis of corporate disclosures, with companies pursuing different strategies to cope.
Most tariffs were blocked by a US trade court last week, but a federal appeals court has temporarily reinstated them to consider the Trump administration's appeal against the trade court's ruling. The 25% tariff imposed on car imports earlier this year has not been affected by the rulings.
Uncertainty worse than tariffs
In a recent survey by Germany's Machinery and Equipment Manufacturers Association (VDMA), nearly three quarters of participants said uncertainty over US trade policy had a strong impact on companies' competitiveness, while only 43% said the same for the 10% tariffs slapped on goods from most US trading partners.
"The uncertainty surrounding the US tariffs is causing more problems in our sector than the tariffs themselves," Andrew Adair, VDMA's trade policy adviser for North America, told Reuters.
"Uncertainty causes customers to delay purchasing decisions, including American companies that are motivated to purchase machinery to ramp up their local production."
Asked what Blume was offering in the talks, which aim to reduce the 25% autos levy, he said: "The Volkswagen Group wants to invest further in the US. We have a growth strategy."
Blume said the Volkswagen Group employed more than 20,000 people directly and more than 55,000 people indirectly in the US, and highlighted a $5.8bn (R103.80bn) investment in US company Rivian.
"We would build on this with further massive investments," Blume said.
Such investments should be factored into any decisions regarding tariffs, said Blume, who said he hoped Brussels and Washington would reach a broad deal for all industries.
Blume declined to say when a deal with Washington could be struck when asked about BMW CEO Oliver Zipse's assessment that tariffs would likely fall from July.
"Of course, I also want it to happen quickly. But it depends on many factors and I can't promise anything."
