00:00Audi's mid-size Q5 and large Q7 SUVs are a favorite amongst many American drivers.
00:07Yet many owners will have to wait for their new vehicles as they sit in U.S. Customs
00:12while the company scrambles a response to new tariffs of 25%.
00:16This is now to consider, to wait what is happening.
00:20Are there any further negotiations with the Trump administration?
00:25What is the strategy within the Volkswagen Group?
00:28How to deal with imports, how to deal with the additional tariffs, who is hit with it, and to what extent.
00:34And I think this is why everybody is waiting.
00:37Audi has responded, saying,
00:39The Volkswagen Group, and thus also Audi AG, is closely monitoring developments
00:44and will conduct a comprehensive internal assessment of the potential impacts,
00:48including on supply chains and our production network, the entire automotive industry,
00:53as well as global supply chains and operations, and also customers, will bear the negative consequences.
01:00Despite Audi's Q5 and Q7 being built in Mexico for the U.S. market,
01:06the German company's vehicles do not comply with the required 75% local content rule
01:12included in the U.S.-Mexico-Canada agreement on trade,
01:16which means they are liable to the 25% tax put on imports.
01:20Many others are facing the same issues.
01:23Netherlands-based auto giant Stellantis, which owns Chrysler, Jeep, and Dodge,
01:28among other major brands, has announced it is pausing production at some of its plants in Canada and Mexico.
01:35Washington is hoping to incentivize automakers to move their production to the U.S.
01:40British automaker Jaguar Land Rover have also paused their U.S. shipments
01:44to assess the impact of Trump's tariffs.
01:47Their cars, the SUVs, they are deemed as light trucks because especially the displacement,
01:54the engine volume they have.
01:56So that means it is 25%, which was the original import tariff,
02:01plus 25% of the penalty tariff, meaning 50% on.
02:05So now it's a consideration, is the volume in the U.S. big enough to perhaps start planning a plant in the U.S.,
02:13what they didn't have before.
02:15Speaking at a Jaguar Land Rover factory in the U.K.,
02:18British Prime Minister Keir Starmer said that the global economic consequences could be profound.
02:24Yes, we have to keep pragmatic and calm in the steps that we take,
02:29but we also need to keep a sense of perspective and context.
02:32The relationship between us and the U.S. is a long-standing relationship
02:36that has helped to keep the peace for 80 years.
02:40We now have to step up to the challenges that tariffs undoubtedly put on the table for us.
02:46And that involves strategic adjustments to automotive export practices
02:49in order to mitigate the financial impacts.
02:53Natalie Kearney, CGTN, Munich.
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