Germany's top automakers are engaged in discussions with the U.S. government to potentially secure a mutually beneficial import tariff agreement. By leveraging their significant U.S. investments and export presence, BMW, Mercedes-Benz, and Volkswagen are aiming to alleviate potential impacts of import tariffs, according to sources familiar with the matter.
The talks, currently underway with the U.S. Department of Commerce, are part of an effort to reach a deal by June. This agreement would likely depend on the automakers committing to substantial investments that could persuade the U.S. administration to soften its stance on tariffs.
In response to President Donald Trump's tariff threats, the automakers have showcased intentions to expand their operations in the U.S. market. Mercedes-Benz plans to include its popular GLC SUV in its Alabama plant production from 2027. BMW is contemplating additional shifts at its Spartanburg facility, while Volkswagen's Audi is slated to manufacture certain models in the United States, a strategy predating the current administration.
BMW, which has urged the European Union to reduce tariffs on U.S. vehicle imports, is the largest exporter of cars from the U.S. Mercedes-Benz also heavily exports from its Alabama plant, which serves as its primary SUV production hub.
As part of the proposed deal, German carmakers could receive export credits for vehicles shipped from the U.S., allowing them to offset these against tariffs. While discussions are ongoing, formal comments on the matter have not been provided by Volkswagen, Mercedes-Benz or BMW, although the carmakers have acknowledged engaging in talks with the U.S. government regarding tariffs.
The European Commission is intensifying its efforts to secure an agreement with the U.S. to eliminate or prevent increases in import tariffs on EU goods. To bolster negotiations, the Commission has requested information on U.S. investment plans from prominent EU companies and CEOs.
In the event of unsuccessful negotiations, the Commission is readying for potential retaliatory measures, such as imposing tariffs on high-value products like motor vehicles and components. The news of the tariff talks led to a rise in the shares of the automakers, with BMW and Mercedes gaining 3.3% and 2.6%, respectively. Although Volkswagen's shares initially climbed 2.2%, they later reverted to previous levels.
The tariff challenges, combined with weak European demand and intense competition, have added to the existing pressures facing the German automotive industry.