Will European cars be exempted from 25% levy?

Automkers Volkswagen and Descendant Confirmed that his vehicles in North America will be exempted from US President Donald Trump’s new roll out 25% tariff, while BMW It is said that it will withstand the levy, as European car manufacturers struggle with new business rules.

The White House leader has long been threatened to slap tariffs on major American business partners, including Canada, Mexico and European Union. Last week, new duties on goods from Mexico, Canada and China came into force.

The threat of import tariffs has increased the alarm bell in Europe, as vehicles and machinery are the largest exports of the European Union for the United States. In 2023, the European Union had 102 billion euros ($ 110.6 billion) in machinery and vehicles with class accounting for 41% of its exports with the US with category accounting for exports.

However, some automating giants of the region may be able to skirt around new duties at least temporarily. Last week, the White House delayed a one-month tariff to vehicle manufacturers whose vehicles comply with the United States-Maxico-Canada Agreement, or USMCA-a trade deal between three countries. Under its conditions, if at least 75% of a vehicle part is generated from North America, it can be exempted from new tariffs on imports from Canada and Mexico.

“Our North American assembled VW-brand vehicles meet the USMCA rules of the origin and 25% tariffs are exempted,” a spokesman for Volkswagen said in an email statement.

“As a global motor vehicle manufacturer, we are monitoring very closely development in North America and assessing any possible impact on the motor vehicle industry and our company as a result of the tariffs declared for USA, Canada, Mexico and the European Union.”

In addition to its major brand, Volkswagen owns various major vehicle brands including Skoda, Audi and Bentley.

Auto giant told CNBC, “We are ready to work with policy makers to find solutions that support the American industry, preserving economic opportunities for workers, businesses and consumers.”

Meanwhile, stalentis – known for their jeep and dodge vehicles – Trump on Friday thanked the USMCA for exemption and promised to increase its American operations. The car manufacturer was one of the major companies, which was given a month’s discount from the levy ahead of the so -called mutual tariffs to be implemented on 2 April.

The firm said at that time, “We share the President’s purpose to manufacture more American cars and create permanent American jobs.” “We are eager to work with him and his team.”

Stelantis shares, which have several plants in Mexico, popped up after Trump announced a discount for car manufacturers last week. The stock was more than 2% on Monday afternoon in London.

On the other hand, the German auto giant BMW said that, if the USMCA regulation remains, it would be under the levy.

BMW said in an email statement, “The current situation about the onset of import tariffs in North America is very unstable and complex.” “Import tariff is the most recent announcement for compliance with USMCA rules. If this regulation remains effective, the BMW group will be one of the affected companies.”

The company said, “Our situation remains unchanged: free trade, which has always been a guiding principle for the BMW group, has great importance around the world.” “It is one of the most important drivers of growth and progress. On the other hand, tariffs obstruct free trade, slow down innovation, and set a negative spiral in speed. Finally, they are harmful to customers, make products more expensive and less innovative.”

In a note for customers on Friday, UBS analysts estimated that 10% sales of the US unit for BMW were imported on a tag of much lower than Mexico, which was largely for 2 and 3 series models of the company.

“It is worth exposing that American imports of BMW from Mexico were already subject to a tariff,” he said. “Old tariffs, all the rest must be the same, resulting in the ebit effect of ~ € 400 meters (before the price increase), relatively small (4%) in terms of a group. The major potential threat to BMW and other German OEMs is a possible tariff on cars manufactured by the European Union, which is facing a time limit on 2 April.”

Trump’s rollout and canada and Mexico’s objectives – where many global car manufacturers have manufacturing plants – have given rise to unstable trade of regional auto shares. Last month, after the President announced a 30 -day delay to Levi, Global Markets saw a large sale of auto shares, in which the assessment fell rapidly.