German automobile manufacturers BMW, Mercedes-Benz, and Volkswagen are reportedly engaging in discussions with the U.S. Department of Commerce in Washington, seeking potential relief from export tariffs. According to sources close to Reuters, the talks aim to strike a deal in June, contingent upon the companies committing to significant investments in the U.S. market.
The proposed measures, as reported by Reuters, suggest that German automakers could earn credits for vehicles exported from the United States. These credits could then be used to offset existing tariffs, potentially mitigating the impact of the 25% export tariffs on car imports announced by U.S. President Donald Trump, set to take effect on July 9. This development comes as the three companies face the prospect of reduced car sales in their biggest export market.
While Volkswagen, Mercedes-Benz, and BMW declined to comment on the ongoing talks with the U.S. government, they had previously acknowledged engaging in discussions over the tariff issue. The news report from Reuters brought a glimmer of hope amid uncertainty, causing shares of German automakers to rise. BMW led the gains with a 3.1% increase, followed by Volkswagen at 2.2% and Mercedes-Benz at 1.8%.
The potential easing of U.S. tariffs comes as the automakers face mounting challenges, including a prolonged slowdown in German industrial output and intensifying global competition. Executives from BMW and Audi, a subsidiary of Volkswagen, have recently hinted at possible progress on the tariff issue in the coming months. In response to the trade tensions, Mercedes-Benz is adapting its strategy by expanding production of its GLC SUV for the North American market at its plant in Tuscaloosa, Alabama. This move aims to mitigate the impact of U.S. import tariffs and strengthen its local manufacturing footprint.
