German luxury auto manufacturer Audi said it is considering moving car production to the United States to avoid tariffs from the Trump administration.
Volkswagen’s subsidiary Audi brand said this week that it is examining various long-term strategies, including potentially shifting production to America, to deal with President Donald Trump’s restrictions on foreign imports.
Audi CEO Gernot Döllner said that the company is “currently assessing various scenarios for additional localization in North America – among other things, to be closer to the needs of local customers and to make ourselves more resilient to global economic uncertainties.”
Although no firm decision was made this week, the German auto giant said that it would be announcing later this year where it intends to produce its primary vehicle models for the American market.
Currently, Audi does not have any production sites in the United States, having opted to produce top-selling models in the U.S. market, such as the Q5, in Volkswagen plants in Mexico.
This has put the brand at risk of being slapped with tariffs under the Trump administration, which has made the reshoring of auto manufacturing back to the U.S. a top priority.
President Trump has singled out the car industry as a key complaint in the ongoing trade dispute with the European Union.
“We have massive deficits with the EU… They don’t take our farm product, they don’t take our cars… How many Chevrolets or Fords do you see in the middle of Munich? The answer is none. The EU has abused the United States for years, and they can’t do that,” Trump remarked last month.
Audi is already facing economic challenges, with the soaring cost of energy in Germany and increased competition from cheap Chinese electric vehicles flooding the European market. The firm said that it would be slashing 7,500 jobs from its workforce as it restructures.
Should Audi shift production to America, it could have a ripple effect on the broader industry. Mercedes-Benz’ production chief Joerg Burzer said on Tuesday that the continued imports of its GLB crossover in the U.S. from Mexico would depend in part on whether rival companies moved their production to the United States, Reuters reported.
The Trump administration tariffs may have already resulted in some auto manufacturing to return to the United States, with Japanese giant Honda reported to be planning to move production of its top-selling Civic hybrid to Indiana from Mexico.
Other major companies such as Apple, Oracle, and Taiwan Semiconductor Manufacturing Co. (TSMC) have also announced plans to invest hundreds of billions of dollars in boosting production in the United States.
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