Audi’s Q9 SUV Faces Tariff Threat as Trump Proposes 25% Import Tax on European Cars

Audi is facing significant pressure over President Donald Trump’s plan to increase U.S. import tariffs on European cars from 15% to 25%. The proposed tariff could disproportionately impact Audi, as the brand does not manufacture vehicles in the United States.

Unlike rivals BMW and Mercedes, which operate production plants in America, Audi relies entirely on imports for its U.S. market. This lack of domestic production makes the brand highly exposed to tariff increases, particularly as it prepares to launch its new Q9 SUV, a flagship model aimed at wealthy American buyers.

The Q9 is manufactured in Slovakia, meaning it would be directly affected by any tariff hike. Audi’s finance chief, Jürgen Rittersberger, acknowledged the potential burden in comments reported by Bloomberg:

“We are still evaluating a potential impact but it’s clear it would be a significant burden on our performance.”

Audi has long discussed establishing U.S. production but has yet to take concrete steps. Rittersberger noted that the company is exploring options with sister brand Volkswagen, which does have a U.S. manufacturing facility. However, he added that without government incentives or tariff relief, local production would be financially challenging.

Audi’s Financial and Operational Challenges

The tariff threat comes as Audi grapples with broader financial and operational difficulties. The company is already implementing cost-cutting measures, including plans to reduce its German workforce by 7,500 employees over the next three years.

Sales have also declined in key markets, including China and North America. In the first quarter of 2024, U.S. sales dropped by one-third compared to the previous year. These challenges have put additional pressure on Audi’s profit margins.

Potential Impact on Porsche and VW Group

Audi is not the only luxury brand within the Volkswagen Group that could be severely affected by higher tariffs. Sister company Porsche, which also lacks U.S. production, may face similar financial strain if the proposed tariffs are enacted.

While Trump has a history of making and then retracting bold policy threats, Audi and other automakers are in a state of uncertainty. If the 25% tariffs take effect, the company may need to accelerate its U.S. strategy—including potential local production—far sooner than anticipated.