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German automaker Audi considering price hikes, production moves to deal with Trump tariffs

German automaker Audi said Tuesday it is considering whether to move production into the U.S. or raise prices as it braces for the impact of President Trump’s tariff plans.

Executives described their plans as part of a report on its performance in 2024, a challenging year for the luxury arm of Volkswagen.

European automakers face additional hurdles from Mr. Trump’s plan to impose tariffs on certain imports from the European Union and from places like Mexico, where Audi has a massive plant in San Jose Chiapa.

Finance chief Jürgen Rittersberger said Audi is mulling “the extent to which we will have to pass on at least some of the tariffs to our customers in the form of price increases,” according to Reuters.

Tariffs are a tax or duty on imported goods. They increase costs along the supply chain and are sometimes passed along to consumers. Yet Mr. Trump says his message is simple: Make your goods in the U.S., and you won’t get taxed.

Audi signaled that it was considering that message.

“We are also 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,” CEO Gernot Döllner said.

The automotive industry is one of several sectors bracing for the fallout of trade wars between the U.S.

The pharmaceutical industry is reportedly lobbying for a carveout from levies, warning of drug shortages or increased costs for patients. For instance, blockbuster weight-loss drugs such as Wegovy and Ozempic are made by Novo Nordisk, a Danish company.

Mr. Trump has imposed a 25% tariff on steel and aluminum products from other countries and imposed levies on Canada and Mexico, only to exempt an array of products covered by the North American trade agreement he struck during his first term.

But he is barreling ahead on a plan to impose reciprocal tariffs on any nation that imposes tariffs or other burdens on U.S. exports. He said those levies will go into effect on April 2, potentially triggering a broad trade war with Europe and other places and causing ripples in the economy.

“April 2 is a liberating day for our country,” Mr. Trump told reporters Sunday on Air Force One. “We’re getting back to some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing.”

Carmakers and others, meanwhile, are girding for the fallout.

“Amid a difficult environment with intensified competition and a sluggish economy, we kept Audi on track in 2024 and closed out the year on financially sound footing,” Mr. Rittersberger said. “However, we still have a tough road ahead of us.”

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