The United States announced a 15% tariff on EU imports of cars, followed by Trump again launching a heavy blow, announcing a 25% tariff on heavy trucks. The 15% tariff on private cars is not a big loss; they can just sell the cars to Europe or other countries. However, the 25% tariff on heavy trucks is fatal for German Volkswagen. Volkswagen's long-nose trucks produced for the US market cannot be sold in Europe/China. Volkswagen has no choice but to accept the loss.
Trump announced that a 25% tariff would be imposed on all imported heavy trucks. This time it targets Europe, in other words, it targets the three heavy truck brands of Volkswagen in Germany: Scania, Volvo, and MAN.
Especially Volvo holds the fourth, fifth, and sixth positions in US heavy truck sales (as a subsidiary), and the seventh is a subsidiary of Mercedes-Benz. With a 25% tariff added, if it is combined with an additional 15% car import tariff, the sales of these brands will basically crash next quarter. If it is not combined, for the transportation industry which is highly cost-sensitive, it will also be significantly impacted.
After implementation, Volkswagen will lose thousands of heavy truck sales per month, which is quite alarming. Especially in this high-cost and highly competitive industry, unless Volkswagen sells these US-spec heavy trucks at a loss, otherwise, the trucks produced now will just end up in the warehouse.
If the tariff on passenger cars reduces the profits of the EU, then this heavy truck tariff is really killing the EU's related industries. Especially these American-style heavy trucks, because of regulatory issues, their production lines are specially designed long-nose models, which are different from the standards of the EU and China. If the US doesn't want them, the only options are to lay off workers or shut down the production lines, as they can't be sold anywhere. Now, it depends on whether Volkswagen can persuade the German government to negotiate with the US, otherwise, Volkswagen will have to lay off employees.
For Volkswagen, this year has been a comprehensive and multi-dimensional attack on the US market, Chinese market, passenger cars, and engineering vehicles. It is estimated that Volkswagen's stock price will take a big hit this year.
Original article: https://www.toutiao.com/article/7554225209264423467/
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