Germany's top automobile manufacturers are actively negotiating with U.S. officials in an effort to reach a mutually beneficial import tariff agreement, according to insiders close to the matter. Automakers BMW, Mercedes-Benz, and Volkswagen are reportedly highlighting their American investments and export volumes to influence a favorable outcome.
According to one source, the carmakers are aiming to secure a deal by June, but success hinges on their willingness to commit to significant U.S.-based expansions. The talks are ongoing with the U.S. Department of Commerce, and the companies hope their investment pledges will help defuse threats of steep import duties.
Since former President Donald Trump reignited tariff threats, the German automakers have begun announcing or advancing U.S. production plans. Mercedes-Benz plans to begin producing its best-selling GLC SUV in Alabama by 2027, BMW is contemplating increased shift capacity at its Spartanburg, South Carolina plant, and Volkswagen’s Audi is planning U.S. production for select models, although that initiative began prior to Trump's policies.
BMW, notably the largest vehicle exporter by volume from the U.S., has also been advocating for the EU to lower import duties on American vehicles from 10% to 2.5%. Mercedes-Benz also heavily exports SUVs from its Alabama facility, which serves as a global production hub for the brand.
A second source shared that the current proposal under review would allow tariff credits for vehicles exported from the U.S. by German automakers—those credits could then be used to offset import duties, potentially easing the impact of any future trade measures.
The ongoing negotiations were first reported by Handelsblatt. While Volkswagen, BMW, and Mercedes-Benz declined official comment, all three have previously acknowledged holding discussions with U.S. authorities regarding tariff concerns.
The United States ranks as the EU’s fifth-largest vehicle import partner, trailing only China, Japan, the United Kingdom, and Turkey. In parallel, the European Commission is intensifying efforts to strike a broader trade agreement with Washington aimed at rolling back or halting any tariff hikes on EU exports.
To support these talks, Brussels has requested detailed U.S. investment plans from major EU-based firms and executives, hoping to leverage these figures in negotiations. However, contingency plans are also in place should the talks stall. The Commission has already drawn up a retaliatory tariff list, with automobiles and auto components topping the potential targets.
Markets responded positively to news of the negotiations. BMW shares jumped 3.3%, Mercedes-Benz gained 2.6%, and Volkswagen saw an initial 2.2% uptick before leveling out. The pressure remains high for German automakers, who are simultaneously grappling with soft demand across Europe and mounting competition in global markets.