The onset of 25-percent U.S. auto tariffs is already shaking up the global automotive industry. Volkswagen is the first major manufacturer to react concretely to the new reality. The German auto giant is temporarily suspending deliveries to the U.S. and has announced a surcharge on all its imported vehicles will hit consumers.
Deliveries halted abruptly, prices set to rise
On Tuesday evening, American Volkswagen dealerships received an internal memo announcing temporary adjustments to deliveries and prices. It explained that all rail shipments from Mexico are suspended until further notice. Vehicles arriving by ship will remain blocked in U.S. ports, with no clear timeline for when they might ger unblocked. The manufacturer promised further details "by mid-April."
Volkswagen also plans to add an “import tax” to the manufacturer's suggested retail price (MSRP) of all its models not assembled in the U.S.. This includes almost the entire VW range, with the exception of the electric ID.4 and the Atlas SUVs, produced in Chattanooga, Tennessee. This surcharge aims to compensate, in whole or in part, for the 25-percent levy imposed by the U.S. administration.
As we reported yesterday, the tax will be indicated on vehicle stickers in Volkswagen showrooms.
The manufacturer's official statements remain cautious. VW told the Wall Street Journal that "We want to be completely transparent during this period of uncertainty."
Shockwave through the industry
VW's move is just the first of many to come. Other manufacturers such as Ford and Stellantis have also already announced job cuts and the temporary shutdown of some factories. Volvo says it plans to increase U.S. production to limit the effects of the tariffs.
The stakes are high: more than $460 billion USD worth of vehicles and auto parts are imported annually into the United States. Faced with the upheaval caused by tariffs, the solutions considered (local production, price increases, range reductions) risk impoverishing the market supply and significantly increasing prices for consumers.
Disruption of the American market
In 2024, nearly half of the vehicles sold in the U.S. were imported. That figure could drop rapidly as brands revise their strategies. Volkswagen, which leads American sales among German manufacturers (ahead of BMW and Mercedes-Benz), is opening a path that others will likely follow.