Volkswagen Group‘s CEO Oliver Blume announced on Sunday that the company is set to halt new investments in the US following President Trump’s backtrack on the 25% tariffs on select European countries.
Earlier this month, the Trump Administration announced that it would impose a 25% levy on EU members Denmark, Finland, France, Germany, the Netherlands, and Sweden, as well as the UK and Norway, due to the purchase of Greenland.
However, the President reversed course days later, telling the World Economic Forum (WEF) that he had reached “the framework of a future deal” on Denmark’s autonomous territory.
Following the announcement, the European Union (EU) agreed to continue working on a trade deal with the US.
Speaking with the German business newspaper Handelsblatt, Blume called the EU’s move the right approach.
“Europe reacted correctly. Europe has many strengths and can act with self-confidence. That is why clear positions are important,” he stated.
The chief of the German giant highlighted the positive effect of Trump’s backtrack on his levy threats.
“In the end, it was positive that the US president ruled out additional tariffs. For [the] industry, stable and reliable conditions are crucial. That’s why we continue to rely on dialogue and international cooperation — on both sides of the Atlantic,” the executive indicated.
Blume also cited tariffs as a barrier to further investment, by stating that, with these “unchanged, a large additional investment is not financially feasible.”
Although VW Group announced in 2023 that it would build a US factory for the Audi brand, the CEO confirmed to Handelsblatt that it will not proceed with the plan without levy relief.
According to the executive, the 25% automotive tariffs specifically on Germany cost the Group €2.1 billion – equivalent to $2.5 – in the first nine months of 2025.
“Given an unchanged tariff burden, large additional investment cannot be funded. Reduction of costs in the short term and reliable business conditions in the long term are what we need,” Blume highlighted.
The company will outline further details of its US strategy in March alongside its annual financial results.
US Tariffs Background
A few months after taking office in early 2025, Trump imposed tariffs on imported goods worldwide, including a 25% one on any auto part and vehicle coming into the US.
During a visit to Ford‘s Dearborn factory earlier this month, the current US President called the 25% tariff “one of the biggest reasons” for a successful economy.
“The Trump tariffs have delivered us trillions of dollars of new investment,” Trump emphasized.
“I am standing up for the American autoworker like no president has stood up before,” he added.
Specifically for vehicles, including electric, imported from China, the former US President Biden had already enforced a 100% levy in 2024.
VW Group Sales
Last year, VW Group – which includes Volkswagen, Audi, Porsche, Škoda, among other brands – delivered 8.98 million units, a slight (0.5%) decline compared to 2024.
BEVs accounted for roughly 11% of the total. Sales of fully electric vehicles rose by 32% to 983,100 units.
Europe remained the Group’s largest market for BEV sales, representing 75% of all deliveries.
