German carmakers in talks with US over possible tariff deal: sources

Germany's leading carmakers are in talks with Washington over a possible import tariff deal, seeking to use their US investments and exports as leverage to soften any blow, three people familiar with the matter said.

BMW, Mercedes-Benz and Volkswagen hope that the talks with the US department of commerce could result in a deal in June, one of the people said, but this would be contingent on companies pledging substantial investments that would sway the US administration.

The carmakers have signalled some plans for US expansion since President Donald Trump began making tariff threats.

Mercedes-Benz will add its best-selling GLC SUV to its Alabama plant line-up from 2027, BMW is considering adding shifts at its Spartanburg plant and Volkswagen's Audi is planning to produce some models in the US, though the brand says that plan predates the Trump administration.

BMW, which has urged the EU to cut tariffs on vehicle imports from the US to 2.5% from 10%, is the largest US car exporter by volume. Mercedes-Benz also exports heavily from its Alabama plant, its centre of production for SUVs.

Export credits

Under the proposals being discussed, German carmakers would get credits for cars they export from the US, which could then be deducted from tariffs, a second source said.

The talks were first reported by Handelsblatt.

Volkswagen, Mercedes-Benz and BMW declined to comment on any talks with the US government. The carmakers have previously said they were holding talks with the US government over tariffs.

The US is the fifth-largest source of car imports for the EU, after China, Japan, Britain and Turkey, according to EU figures.

The European Commission, which oversees trade policy for the 27-nation bloc, is stepping up efforts to secure a deal with Washington to end US import tariffs on EU goods, or at least prevent any increases.

Brussels has asked the EU's leading companies and CEOs for details of their US investment plans as leverage for negotiations.

Still, the Commission is also preparing for retaliation should talks fail, with motor vehicles and motor vehicle products among the highest value items on a list published by the Commission earlier this month of products that could be hit with countermeasures.

Shares in the carmakers got a boost from news of the talks, with BMW up 3.3% and Mercedes up 2.6%. Volkswagen's shares initially rose 2.2% before returning to their previous value.

Trump's tariff strategy has added to the pressure on a German car industry already struggling with weak European demand and stiff competition.