{"id":81503,"date":"2026-03-10T22:43:40","date_gmt":"2026-03-10T19:43:40","guid":{"rendered":"https:\/\/www.nationalturk.com\/en\/?p=81503"},"modified":"2026-03-10T22:43:40","modified_gmt":"2026-03-10T19:43:40","slug":"trump-trade-war-hits-volkswagen","status":"publish","type":"post","link":"https:\/\/www.nationalturk.com\/en\/trump-trade-war-hits-volkswagen\/","title":{"rendered":"Trump trade war hits Volkswagen as profits plunge 53%"},"content":{"rendered":"

The escalating trade tensions triggered by U.S. tariffs are weighing heavily on Volkswagen, one of the world\u2019s largest car manufacturers. According to the company\u2019s 2025 financial results, operating profit fell sharply by 53.5 percent to \u20ac8.9 billion. CEO Oliver Blume attributed the company\u2019s worst performance in a decade to Trump\u2019s tariffs, fierce competition in China, and strategic changes at luxury brand Porsche.<\/p>\n

Mexico production strategy under pressure<\/strong><\/h2>\n

For decades, Volkswagen relied on a global supply chain that included large-scale production in Mexico, where lower costs and a free trade agreement allowed vehicles to be exported easily to the United States.<\/p>\n

However, Trump<\/a>\u2019s 27.5 percent tariff on goods from Mexico has disrupted that model.<\/p>\n

\u201cWe have a strong localized footprint in Mexico. It\u2019s no longer worthwhile to export vehicles from Mexico to the U.S.,\u201d Blume said during a media briefing.<\/p>\n

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Porsche also exposed to tariffs<\/strong><\/h3>\n

Volkswagen\u2019s luxury subsidiary Porsche has also been affected. Because Porsche vehicles are produced entirely in Europe, they face the full impact of U.S. tariffs when entering the American market.<\/p>\n

As a result, Volkswagen now expects its revenue this year to remain flat or grow by no more than 3 percent.<\/p>\n

\u201cWe are operating in a fundamentally different environment,\u201d Blume said.<\/p>\n

Rising competition from Chinese automakers<\/strong><\/h3>\n

With the United States imposing steep tariffs on Chinese vehicles and banning connected cars, Chinese automakers are increasingly turning toward Europe for growth.<\/p>\n

Volkswagen is now facing mounting competition from Chinese brands in its key European market.<\/p>\n

\u201cWe will need to do more because our costs are still too high in Europe,\u201d Blume said. \u201cChinese brands see huge business potential in Europe, so we have to fight back.\u201d<\/p>\n

Challenges in China<\/strong><\/h4>\n

The company is also struggling in China, once its largest market and revenue source. The rapid shift toward electric vehicles and growing preference for domestic brands among Chinese consumers have weakened Volkswagen\u2019s position.<\/p>\n

To regain ground, Volkswagen plans to launch new electric vehicle models in China this year.<\/p>\n

Job cuts in Germany<\/strong><\/h3>\n

Slowing growth has forced the company to implement significant cost-cutting measures. In 2024, Volkswagen announced plans that resulted in the loss of 35,000 jobs and the closure of German factories for the first time in the company\u2019s history.<\/p>\n

The number of job cuts in Germany is now expected to reach 50,000 by 2030, affecting multiple brands within the group, including Audi and Porsche.<\/p>\n

Defense sector could offer opportunity<\/strong><\/h4>\n

One possible opportunity could emerge from the European Union\u2019s push to expand defense production. With weakening demand in the automotive sector, manufacturers may use their mass-production capabilities to support the defense industry.<\/p>\n

Blume said discussions are ongoing with defense companies regarding the future of Volkswagen\u2019s Osnabr\u00fcck factory.
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