Volkswagen Profits Hit Hard by Trump's Tariffs; Germany Sees Rise in Deportations
German automobile giant, Volkswagen, has experienced a significant drop in profits in the first half of this year, largely due to U.S. import tariffs. Concurrently, Germany has reported a slight increase in deportations compared to the first half of the previous year.
Volkswagen's Financial Struggles
Volkswagen said the U.S. import duties erased approximately $1.5 billion from its profit in the first half of the year, according to The New York Times. The German automaker has also reduced its sales and profit margin forecasts for the entire year, marking the first assessment of the damages caused by the trade war initiated by U.S. President Donald Trump, as reported by Folha de S.Paulo.
The Guardian further elaborates that the company suffered a €1.3bn (£1.13bn) decline in operating result primarily due to high costs from increased U.S. import tariffs
. As a result, the company is considering cutting 35,000 jobs by 2030, even as it makes strong progress in realigning the company.
Al Jazeera English added that Volkswagen has joined other carmakers like Stellantis and GM in reporting hits to their profits due to tariffs driving up costs for the industry.
Escalating Trade Tensions
The tensions between the U.S. and the European Union over trade have been escalating. Donald Trump, the U.S. President, is expected to decide soon on a potential EU trade deal or impose a 30% tariff, according to TASS.
Sky News world reports that Trump has been showing signs of irritation over the term 'TACO' (Trump always chickens out), indicating the possibility of an escalation in the trade war come August.
However, the South China Morning Post suggests there may be a silver lining to Trump's universal tariffs. They argue that these tariffs expose the hypocrisy and self-defeating internal trade barriers that countries or trading blocs have created over time, leading to a large drag on their own economies.
Deportations in Germany
Simultaneously, Germany has seen a slight increase in the number of deportations compared to the first half of the previous year, according to Deutsche Welle. The reasons for this increase were not clearly outlined in the sources.
Final Thoughts
In conclusion, Volkswagen and other carmakers are feeling the financial pinch due to the ongoing trade war between the U.S. and the EU. The imposition of tariffs has led to significant profit losses, causing companies to reconsider their financial forecasts and layoff plans. Meanwhile, Germany is experiencing an uptick in deportations, although the reasons for this remain unclear. The global community watches closely as the trade war continues to unfold, with many wondering what the future holds for international trade and relations.