The idea fell on deaf ears in the U.S. and angered other EU member countries, which feared that such a scheme would move production out of the EU and exacerbate deindustrialization across the continent. It would also primarily benefit just two automakers: BMW and Mercedes-Benz.
Volkswagen, meanwhile, wants to offer “huge investments and have the option to discount the tariff level” while keeping the export offset scheme as a potential option in the future, Blume said.
The automaker has invested $14 billion in the U.S., he said, through local production partnerships and the construction of a new plant in South Carolina that will produce the Scout models that are sold exclusively in the U.S. and Canada. The idea is to discount that sum from any tariff the company would face.
However, the carmaker cautioned that a 15 percent deal with the EU addresses only part of the problem, as it would leave a 25 percent tariff in place on exports to the U.S. from Mexico, where Volkswagen and its peers have extensive production facilities.
American automakers bristled at the Japan trade deal, as some cars manufactured by U.S. companies could face higher duties than some cars built entirely overseas.