Volkswagen will continue to be impacted by 25% tariff on car imports from Mexico as deal takes time to be concluded
- Volkswagen recently got reprieve after the EU and US agreed to 15% tariff on EU goods, lowered from 30%.
- However, it continues to face 25% tariff on Mexico imports after Trump announced today that 25% tariff will be extended for 90 days.
- Around 340,000 or 47% of Volkswagen models sold in the US in 2024 were produced in Mexico.
- Volkswagen said in Q2 2025 earnings call that a 15% tariff on both Mexico and Europe will likely bring its operating return on sales target to 4.5% in 2025. It’s guiding operating return on sales target of between 4% and 5% for 2025, the lower range being pegged on 27.5% tariff and the upper range being pegged on 5% tariff.