Volkswagen to suffer 1.3‑billion‑euro blow from Trump tariffs

b>Volkswagen Announces Factory Closures and Job Cuts Amid US Tariffs

b>Financial Impact and Restructuring Efforts

Volkswagen reported a significant loss of 1.3 billion euros in its first half due to tariffs imposed by US President Donald Trump. Net profit fell 38.5 percent year‑on‑year, reaching 4.48 billion euros ($5.26 billion).

Higher sales of lower‑margin electric vehicles (EVs) and restructuring costs contributed to the decline, according to the automaker.

b>Management Outlook

• Finance chief Arno Antlitz said Volkswagen was “on the right track” and performance sat at the “upper end of expectations” when tariffs and restructuring costs were excluded.
• Antlitz warned that tariffs would “likely remain a permanent burden” and that the company must intensify cost‑cutting to offset the effect.
• CEO Oliver Blume emphasized the need for a balanced outcome on tariffs, urging EU Commission and US government to negotiate a fair solution.

b>Job Reductions and Revenue Outlook

• In December, Volkswagen struck an unprecedented deal with unions to eliminate 35,000 jobs in Germany by 2030 as part of a €15 billion‑per‑year savings plan.
• The automaker cut its revenue and profit outlook, citing “political uncertainty and increased barriers to trade” for the remainder of the year.
• Volkswagen now forecasts a profit margin of 4–5 percent for 2025, down from 5.5–6.5 percent previously, amounting to billions of euros for the firm.
• The range assumes that the United States will levy tariffs of 10 percent on imported cars in the best case and keep its current rate of 27.5 percent in the worst scenario.

b>North American Sales and US Tariffs

• Sales volume in North America fell 16 percent “mainly due to tariffs” in the first half, even as worldwide sales rose slightly.
• Trump’s April tariff hike added a 25‑percent levy on imported cars, part of an aggressive trade policy aimed at boosting US manufacturing.
• European carmakers faced similar challenges: Stellantis reported a 25 percent plunge in North American vehicle sales volume in the second quarter.
• US and EU diplomats are negotiating ahead of Trump’s latest deadline, with a blanket duty of 30 percent threatened after August 1 if no agreement is reached.

b>Stock Performance

Volkswagen’s shares fell 1.0 percent on the Frankfurt Stock Exchange, with the market overall down 0.9 percent.