By Rachel More
BERLIN (Reuters) -Europe’s largest car manufacturer Volkswagen is hoping investment commitments can help it negotiate further concessions on U.S. tariffs once Washington and the European Union strike a broad trade deal, CEO Oliver Blume told investors on Friday.
As they wait for the outcome of trade talks between the U.S. and the EU ahead of an August 1 deadline, European carmakers are also looking at possible investments or production shifts that might appease President Donald Trump and bring down tariffs.
“We hope that it will come to a well-balanced deal between the U.S. and the EU, which allows fair trade between the regions,” Blume told investors after reporting a second quarter impacted heavily by tariffs.
Blume said he was expecting a 15% tariff for the EU, similar to one the Trump administration agreed with Japan earlier this week. That would replace a 25% tariff imposed by Trump on car and parts imports in April.
An additional deal with Volkswagen would come on top of this, once the tariff row is ended, Blume said. Trump imposed a 25% tariff on car and parts imports in April.
“We have a very attractive investment package we will do there,” he said, adding that the company has been in “good discussions” with the U.S. government.
Pressed by investors for details on possible U.S. investments, Blume spoke only of a “scalable programme,” including projects with a clear business case.
The executive also mentioned the possibility of opening a plant for Volkswagen’s luxury brand Audi in the U.S., where the subsidiary currently has no production presence.
While there are expectations that the EU can agree a 15% tariff, avoiding the 30% levy that would come into force on August 1 without a deal, French car parts supplier OpMobility said it was concerning that the EU acting as a bloc seemed unable to negotiate better terms than individual countries.
“In the short term, we can probably say that we’ve avoided the worst, but that does not mean that it’s a good deal, at the end of the day it shows that the relationship is unbalanced,” CEO Laurent Favre said late on Thursday.
(Reporting by Rachel More and Christina Amann in Berlin and Gilles Guillaume in Paris;Editing by Tomasz Janowski)
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