Car Giant Volkswagen Motoring Up U.S. Investment to Soften Tariffs Blow

German car giant Volkswagen (VWAGY) is ready to step up investment in the U.S. as part of talks with the Trump administration on tariff rates.

Constructive Talks

Volkswagen chief executive Oliver Blume told German newspaper Sueddeutsche Zeitung that the iconic carmaker was holding “fair” and “constructive” talks with the U.S. government on tariffs and wanted to ramp up investment in the States.

Blume revealed that he had been in Washington talking to U.S. Commerce Secretary Howard Lutnick but said he had agreed to keep the details of the discussions confidential.

As reported earlier this week, Germany’s carmakers, including Volkswagen, were in talks with Washington over a possible import tariff deal, seeking to use their U.S. investments and exports as leverage to soften any blow.

The aim, of course, is to reduce a 25% import levy on carmakers brought in by President Trump earlier this year. Europe is also potentially on the hook for a 50% tariff hit, although trade talks between the U.S. and the EU will likely soften that blow.

U.S. Growth Strategy

Such talks have already helped the U.K. reduce its car levy hit to 10% attracting the likes of Japanese carmaker Toyota (TM) looking to up production there for vehicles sent over to the States.

Other firms such as Honda (HMC) have announced plans to increase investment in the U.S. to avoid the worst of the tariffs. Volkswagen looks like it might follow suit.

“The Volkswagen Group wants to invest further in the USA. We have a growth strategy,” Blume said.

Blume said that the Volkswagen Group already employs over 20,000 people directly and over 55,000 people indirectly in the U.S., also singling out a $5.8 billion investment in U.S. company Rivian (RIVN).

“We would build on this with further, massive investments,” Blume said.

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