Volkswagen company, severely affected by Trump's rates. The car giant lost over 1 billion euros in several months
The German car manufacturer Volkswagen said the import rates imposed by Donald Trump cost him over 1 billion euros in the first half of the year.
The German manufacturer was affected by the tariffs imposed by Trump photo shutterstock
Volkswagen said it has made important progress in the company's realization, which takes into account the reduction of 35,000 jobs by 2030, but suffered a “Decline of the operational result of 1.3 billion euros, mainly caused by the high costs generated by the increase of the US import rates.”
The company has also reduced its profit margin for the entire year to an interval between 4%and 5%, based on the assumption that the tariffs imposed by the US-between 10%, in the best case, and the current level of 27.5%, in the worst-will become permanent by the US president's decision, The Guardian reports.
The group, emblematic for the German industry, also owns the Audi, Seat and Skoda brands, as well as luxury brands Lamborghini and Bentley, as well as commercial vehicles, including Scania trucks.
The decrease of the revenues highlights the continuous calls of the German Chancellor Friedrich Merz to Trump for the urgent signing of a tariff agreement, with concessions for the EU automotive industry.
The car industry, affected by rates
On Monday, producer Vauxhall, Stelantis, announced that Trump's rates have already brought him costs of 300 million euros, while, last week, the Swedish brand Volvo-owned by the Chinese-said he had suspended the sale of models in the US and registered a significant decrease in the second quarter of the year.
German car exports to the US have dropped sharply in April and May, as Trump's import rates have affected the sales of car manufacturers on the most important foreign market, the Automation Association (VDA) said on Thursday.
Car exports to the US decreased by 13% in April and 25% in more than the same months of last year, VDA said. In total, 64,300 vehicles were delivered to the US in the two months.
Before Trump's return to the White House, the US was charging a 2.5% rate for cars made in Europe, while the EU required a 10% rate for US imported vehicles.
USA and EU, close to an agreement
However, the EU is close to an agreement with the US on the introduction of 15% general rates for most goods, without any special exemption for the auto industry, if it reaches an agreement before the deadline imposed by Trump: August 1.
On Thursday, European officials said they are close to an agreement, but Trump is not expected to sign an executive ordinance in the next period, as a private visit to his luxury golf resorts in Turnberry (Ayrshire) and Menie (Aberdeenshire).
Separately, the shares of the German company Puma decreased by over 18% on Friday morning, after it announced that it is expected that the US commercial tariffs are costing 80 million euros from the gross profit this year and that they are now estimating a loss in the adjusted earnings and taxes.
Much of the sports equipment industry is facing higher costs due to US commercial tariffs, as production is outsourced in China, Vietnam, Cambodia and Bangladesh.
