Volkswagen Eases Tariff Concerns By Freezing US Prices Until May

In an attempt to retain customers and persuade them to continue visiting dealerships following the Trump administration’s hike in tariffs, Volkswagen announced that it would maintain prices in the United States until next month.

“We don’t know what that regulatory or tariff environment will look like even next week,” Kjell Gruner, VW’s chief executive officer for North America, said in an interview at the New York International Auto Show. “We want to instill confidence in our consumers and dealers by the end of May.”

VW’s move, similar to those by Hyundai Motor Co., Ford Motor Co., and Stellantis NV, is designed to assuage concerns that President Donald Trump’s 25 percent tariff on imported cars will raise prices by thousands of dollars. New cars, which average nearly $50,000, are already out of reach for many Americans struggling with high interest rates.

The decision contradicts a previous report that VW planned to add import taxes to the prices of its cars. VW sent a memo to dealers asking for information on how to handle communication about any potential price increases and tariff costs, and this was misinterpreted as a definitive plan, Gruner said.

The German automaker’s flagship brand could share the new costs among suppliers, dealers and consumers after May if the levies remain in place, he said. Any price increases starting in June would be based on a careful analysis of VW’s supply chain and tariff costs relative to competitors, he added.

Gruner was in New York to show off a new version of the best-selling Tiguan. The SUV, built at VW’s plant in the Mexican city of Puebla, now faces a 27.5 percent levy under the president’s auto import tariff that took effect April 3. That’s a huge jump from the previous 2.5 percent tariff under the USMCA trade deal that Trump negotiated with Mexico and Canada during his first term.

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