Trump's tariffs on imported cars: How global automakers are responding
What's the story
Global automakers, including Volkswagen and Mercedes-Benz, are preparing for the blow of President Donald Trump's recently imposed 25% tariffs on imported cars.
The move has led these companies to consider measures like price hikes and moving production to the US.
This is viewed as a direct reaction to shield themselves from the new trade policy which heavily impacts carmakers across the globe.
Price adjustment
Volkswagen to add import fees
Volkswagen, Europe's largest carmaker, has announced plans to add import fees into the sticker prices of its vehicles exported to the US. It also plans to temporarily halt rail shipments of vehicles from Mexico.
The move highlights the immediate effect of Trump's tariffs on the company's pricing strategy.
Meanwhile, Volvo and Mercedes-Benz are mulling upping production in the US in a bid to circumvent these trade levies.
Impact assessment
German carmakers among those most affected by new tariffs
German carmakers are likely to take the hit of Trump's heightened tariffs on auto imports. These levies are expected to drastically increase costs and disrupt supply chains.
The robust demand for SUVs and slower EV adoption rate make the US a profitable market for brands such as Mercedes-Benz, BMW, and Porsche.
Trade policy criticism
Germany's auto lobby criticizes tariffs
Hildegard Muller, head of Germany's auto lobby VDA, called the tariffs a "fundamental turning point in trade policy."
She warned that this move will only produce losers including US consumers who will face "rising inflation and a reduced choice of products."
This statement highlights the potential negative consequences of these tariffs on both the economy and consumer choices.