Volkswagen, the renowned German car manufacturer, recently informed U.S. dealers that it intends to introduce an import fee later this month on vehicles it imports into the American market.
This decision marks one of the most evident responses by automakers to the hefty 25% tariffs that President Trump has levied on auto and parts imports. The tariffs affecting vehicles were implemented on Thursday, with those on parts set to take effect on May 3.
In a memo dated April 1, Volkswagen communicated to dealers that the specific fees would be finalized by mid-April, according to a document accessed by The New York Times. The company also mentioned plans to reduce sales incentives and has paused rail shipments of vehicles from its Mexican facilities to the U.S., though shipments by sea remain unaffected.
For the time being, Volkswagen intends to keep tariff-affected cars at the port. Dealers were also alerted that the price of the Volkswagen Atlas SUV—manufactured in Chattanooga, Tennessee—might be influenced by the tariffs due to its reliance on imported parts. The full impact, however, will only become clearer by May, as noted in the memo.
Volkswagen’s operations in the U.S., which include the Audi and Porsche brands, largely depend on imported vehicles. Beyond the Atlas, Volkswagen also produces the ID.4 electric SUV in Tennessee.
Volkswagen confirmed the communication, emphasizing the importance of transparency during these uncertain times. “We are committed to acting in the best interests of our dealers and customers, and will share our strategy once the financial implications are thoroughly assessed,” the company stated.
The ripple effect of these tariffs is prompting similar shifts across the auto industry. Stellantis, the parent company of Jeep, Ram, Dodge, and Chrysler, announced on Thursday its decision to temporarily cease operations at factories in Mexico and Canada as a direct response to these auto tariffs.
Stellantis highlighted that its plant in Windsor, Ontario, known for manufacturing the Chrysler Pacifica and Dodge Charger, will halt production for two weeks. Meanwhile, the Toluca, Mexico facility, responsible for producing the Jeep Compass and Wagoneer S, will shut down from April 7 for the remainder of the month.
This production pause in Canada and Mexico by Stellantis is anticipated to result in approximately 900 layoffs in Indiana and Michigan.
