Volkswagen may avoid 25% Trump tariff, but BMW and others face trade levy

Volkswagen said on Thursday that its vehicles made in North America will likely avoid being subject to the 25 per cent tariffs US President Donald Trump has imposed on imports from Mexico and Canada, but other carmakers, including BMW, may not be exempt. 

Trump granted a one-month reprieve on tariffs to automakers who complied with the United States-Mexico-Canada Agreement (USMCA) rules of origin this week, after saying such duties would go into effect March 4. But which automakers will end up being subject to tariffs isn't entirely clear. 

A spokesperson for VW said its North American vehicles do comply with the terms of the USMCA. A spokesperson for BMW said vehicles made in the United States and Mexico do not comply with the rules of the trade deal, potentially subjecting it to the steep duties. 

About 10 per cent of BMW's US sales are imported from Mexico, the spokesperson said, adding that the company opposed the tariffs.

"In the end, they are detrimental to customers, making products more expensive and less innovative," the company said in a statement. 

Mazda said it believes "for the next 30 days, under the USMCA, the Mexico built Mazda3 and CX-30 will not be subject to the tariffs, but we are awaiting final and definitive guidance from the administration." 

Detroit's automakers lobbied for such an exemption for weeks, and praised Trump's announcement that they would receive temporary relief. 

Among German carmakers, the Volkswagen Group is the most exposed to Trump's tariff threats on Mexico and Canada. 

Its Audi and Porsche brands have no US manufacturing base, its VW passenger car brand's US sales consist mainly of imports from its Mexican plant, and its battery cell plant under construction in Canada was set to deliver batteries to the United States. 

Audi, which has one plant in Mexico producing its Q5 SUV, was not immediately available for comment on whether the cars produced there were USMCA-compliant. 

Mercedes said it had not yet seen the details of changes to the tariffs on imports from Canada and Mexico and declined to say whether it complied with the USMCA. 

Nissan Motor also declined to comment. 

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