German car giant to suspend deliveries to US — ApsnyNews Business News

German carmaker Audi is halting deliveries of its vehicles to the US due to the new tariffs on automobiles imposed by US President Donald Trump, the newspaper Automobilwoche has reported.

Trump’s 25% levy on car imports took effect last week as part of a series of “reciprocal” measures that have rattled global markets.

A spokeswoman for Audi told the outlet on Monday that a letter had been sent to dealers instructing them to withhold all vehicles that arrived after April 2. Dealers were also urged to focus on reducing existing inventory.

Audi currently has more than 37,000 vehicles in stock in the US that are not affected by the new tariffs and can be sold, the spokeswoman said, adding that this inventory should last about two months.

The company does not operate its own production facility in the US and imports all of its vehicles. Its US bestseller, the Q5, is produced at Audi’s plant in Mexico, while other models are sourced from factories in Germany, Hungary, and Slovakia.

Audi’s parent company, Volkswagen, has also warned US dealers of additional costs, according to a Wall Street Journal report last week. Volkswagen has reportedly halted the deliveries by rail from Mexico and from US ports. Clarity on pricing is expected by mid-April.

On April 3, Trump slapped tariffs on nearly all of America’s trading partners, including the EU, arguing the measures were needed to protect US manufacturers. In addition to the 25% levy now applied to car imports, 150 categories of auto parts will also become subject to the surcharge starting in May.

The German Association of the Automotive Industry called the tariffs “a disastrous signal for free, rules-based trade.” 

Analysts warn the German auto industry could be among the hardest hit, with Volkswagen and Mercedes-Benz facing significant challenges in the US market. Rising production costs and factory closures have already put pressure on parts of Germany’s manufacturing sector.

On Monday, European Commission President Ursula von der Leyen, who has called Trump’s tariffs a “major blow to the world economy,” offered to scrap duties on all industrial goods as part of trade talks.