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European automakers are responding differently to President Donald Trump's newly implemented 25% tariffs on imports from Mexico and Canada, highlighting the complex trade environment facing the global automotive industry.
Volkswagen and Stellantis have confirmed their vehicles manufactured in North America will be exempt from these tariffs. "Our North American assembled VW-brand vehicles meet the USMCA rules of origin and are exempted from the 25% tariffs," a Volkswagen spokesperson stated in an email.
The exemption comes after the White House granted a one-month tariff delay to automakers whose vehicles comply with the United States-Mexico-Canada Agreement (USMCA). This trade deal specifies that vehicles with at least 75% of parts originating from North America can avoid these new tariffs.
Stellantis, known for brands like Jeep and Dodge, expressed gratitude for the exemption. "We share the President's objective to build more American cars and create lasting American jobs," the company stated on Friday. Their stock rose over 2% on Monday in London trading following this news.
BMW, however, faces a different situation. The German luxury automaker confirmed it will be subject to the tariffs if current regulations remain in place. "If this regulation remained in effect, the BMW Group would be one of the affected companies," BMW stated, emphasizing its opposition to tariffs as barriers to free trade.
UBS analysts estimate that approximately 10% of BMW's U.S. unit sales are imported from Mexico, primarily their 2 and 3 series models. The resulting financial impact could reach around €400 million before any price adjustments, representing about 4% of the group's earnings.
The stakes are particularly high for European manufacturers. In 2023, the EU had a €102 billion ($110.6 billion) trade surplus with the U.S. in machinery and vehicles, with this category accounting for 41% of its exports to America.
Market volatility has characterized the response to Trump's tariff announcements. Global auto stocks experienced significant sell-offs last month when the president announced a 30-day delay to the levies, with valuations falling sharply.
The situation remains fluid as the April 2 deadline approaches for "reciprocal tariffs" to take effect. Automakers are closely monitoring developments, with Volkswagen stating they are "assessing any potential effects on the automotive industry and our company as a result of the tariffs."
