German Automakers Report Billions in Tariff-Related Losses Amid US Trade Tensions

Volkswagen Group reported €1.3 billion hit to operating profit in first half 2025, with Audi and Porsche divisions particularly affected, experiencing profit drops of approximately 64% and 91% respectively. Consequently, both brands lowered full-year margin forecast to 4-5% from 5.5-6.5%, underscoring mounting pressure from escalating trade barriers affecting European manufacturers.

Volkswagen CEO Oliver Blume stated the group's US plants were heavily affected by tariff hikes, incurring extra €1.3 billion costs in first half alone, whilst Audi CFO Juergen Rittersberger attributed approximately €600 million losses to tariffs. Recent deal between EU and United States lowered tariff rate from 25% to 15%, though experts warn reprieve may be short-lived as high export costs and lingering policy uncertainty continue weighing on Germany's manufacturing sector.

German Association of Automotive Industry president Hildegard Mueller noted the lower rate still leaves carmakers with billions of euros in added costs annually, representing heavy burden as they navigate pivotal transition toward electrification. Germany exported approximately 450,000 vehicles to United States in 2024, whilst German carmakers produced over 840,000 vehicles at US facilities, roughly half exported globally.

Industry observers noted German manufacturers increasingly pivoting toward Chinese market seeking regulatory stability amid transatlantic trade uncertainty.