Amid growing trade tensions between the United States and the European Union, Volkswagen has felt a strong setback.

The German automaker confirmed that it lost $1.5 billion during the first six months of 2025, largely due to new tariffs imposed by the Trump administration.

Trade restrictions have not only made the final price of vehicles imported from Europe more expensive, but have also forced a reduction in the volume of units shipped to the United States, where demand has begun to shift towards brands with local or Asian production.

The US market, the most affected

According to the financial results for the second quarter of 2025 published by Volkswagen Group saw sales revenue in the United States fall by 29.4%.

This dramatic decline is directly attributed to the 27.5% tariffs imposed on vehicles from the European Union.

This scenario has generated a chain effect: fewer imported cars, higher prices at dealerships, and customers who end up opting for other brands, especially Asian ones, which do not face the same trade obstacles.

Mixed figures for the automotive group

The crisis is not limited to the US market. In China, sales also fell, although to a lesser extent. In Europe, the group managed to maintain positive numbers, but without growing as in previous years.

Porsche, one of Volkswagen's premium brands, reported a 6.0% drop in global sales. Audi, another firm under the group's umbrella, had a 5.9% drop.

Despite these negative figures, the total number of vehicles sold by Volkswagen in the first half of the year was 4.36 million units, a small increase of 0.5% compared to the 4.34 million in the same period in 2024.

This slight increase was not enough to offset losses in key markets. Exports to the United States, traditionally a solid source of income, have become a financial burden due to high import taxes.

Hope for a diplomatic solution

Volkswagen makes no secret of its desire for the European Union to reach a trade agreement with the United States, similar to those already signed with Japan and the United Kingdom.

In those cases, tariffs were reduced, allowing the brands to reposition themselves and adjust their strategies in the US market.

In the agreement with Japan, tariffs were reduced from 25% to 15%. In the British case, the reduction was even more significant: from 27.5% to just 10%. These measures allowed them to recover profit margins and improve competitiveness.

The German group believes that a similar pact with the EU could restore some of its lost stability. However, negotiations are not progressing at the desired pace, and the Trump administration's protectionist rhetoric adds to the uncertainty.

Threat of new tariffs

The outlook could worsen. President Donald Trump has warned that tariffs could rise to 30% before the end of the year unless the European Union makes concessions. This measure would put even more pressure on manufacturers such as BMW, Mercedes-Benz, Porsche, Audi, and Volkswagen itself. Many of the cars sold in the United States from these brands are produced in Germany, Mexico, and Canada. However, models manufactured in Europe are the most affected by current policies. Meanwhile, Volkswagen Group executives are trying to redesign their logistics and production operations to reduce their dependence on direct imports from Europe. However, these types of decisions are not implemented immediately, and the company continues to absorb losses in the millions.

Industrial reconfiguration underway

To avoid a greater impact in the coming quarters, Volkswagen is considering strengthening its production in North America, particularly in Mexico, where it already has a major plant.

This would allow it to avoid higher tariffs and compete on price with American and Japanese manufacturers that operate within the same trading bloc.

Even so, the restructuring has its own costs. After a year of sustained investments in electrification, autonomous mobility, and software development, the group is now forced to redirect part of these resources to logistical adjustments and new assembly lines.

A second half of the year that will be equally complex?

The company acknowledges that the second half of 2025 will not be easy. Although the slight rebound in total sales offers a sign of resilience, macroeconomic conditions and trade policies continue to represent a significant risk.

For Volkswagen and other European manufacturers, the clock is ticking. If an agreement is not reached between the United States and the European Union in the coming months, the threat of new tariffs could materialize, further affecting profitability and forcing layoffs or closure of operations in some regions.