The Blubber

Germany’s top automakers are engaged in discussions with U.S. officials over a potential deal to ease import tariffs, aiming to leverage their American investments and exports to reduce potential impacts, according to three people familiar with the matter.

BMW (BMWG.DE), Mercedes-Benz (MBGn.DE), and Volkswagen are hopeful that ongoing talks with the U.S. Department of Commerce could lead to an agreement as early as June, one of the sources said. However, any such deal would likely hinge on the companies committing to substantial new investments in the U.S. that could help influence the administration’s stance.

Since President Donald Trump began threatening new tariffs, the German automakers have hinted at plans for U.S. expansion. Mercedes-Benz plans to add production of its top-selling GLC SUV to its Alabama facility starting in 2027. BMW is exploring the possibility of increasing shifts at its Spartanburg, South Carolina plant. Volkswagen’s Audi brand has also announced plans to manufacture some models in the U.S., although the company notes that the move was already in the works before Trump returned to office.

BMW, currently the largest U.S. car exporter by volume, has previously urged the European Union to reduce its 10% tariff on U.S. vehicle imports to 2.5%. Mercedes-Benz also relies heavily on exports from its Alabama SUV plant.

Export Credits in Play

As part of the discussions, one proposal under consideration involves awarding German automakers credits for vehicles exported from the U.S., which could then be applied against future tariffs, a second source explained.

The talks were initially reported by German business daily Handelsblatt.

BMW, Mercedes-Benz, and Volkswagen declined to comment on any current negotiations with the U.S. government. However, the automakers have previously confirmed that they have held tariff-related discussions with Washington.

The U.S. ranks as the fifth-largest source of car imports into the European Union, behind China, Japan, the United Kingdom, and Turkey, according to EU data.

The European Commission, which manages trade policy for the EU’s 27 member states, has been ramping up efforts to reach a deal with the U.S. aimed at removing or at least preventing increases to import tariffs on EU goods. As part of this push, Brussels has requested detailed U.S. investment plans from major European firms and CEOs to strengthen its negotiating position.