Volkswagen nears US investment deal amid tariff losses

Volkswagen is in advanced negotiations with the U.S. government to make significant investments aimed at expanding its local operations and mitigating the impact of steep 27.5% import tariffs on European vehicles, primarily affecting Audi and Porsche, which lack U.S. production facilities. CEO Oliver Blume described the trade relationship as "asymmetric," criticizing the tariffs on European cars compared to the tariff-free entry of American industrial goods into Europe. Volkswagen is exploring building a new Audi plant in the U.S. and strengthening supply chains and workforce capabilities to localize production, hoping to secure financial or tax support from the U.S. government. The automaker is also awaiting a promised tariff reduction to 15% from the Trump administration, which would alleviate financial pressures and accelerate investment decisions. Blume acknowledged that his dual role as CEO of both Volkswagen and Porsche is not sustainable in the long term, with a decision on which position to relinquish pending. The investments represent a strategic pivot to reduce dependence on imports, counter geopolitical risks, and respond to domestic demand for luxury and electric vehicles in the U.S.