Volkswagen on Tuesday warned against the "harmful economic impact" of tariffs that U.S. President Donald Trump is proposing on imports from Mexico, where Europe's top carmaker operates a major factory.

Volkswagen executives are worried about the possible introduction of tariffs on goods from Mexico, proposed by the administration of US President Donald Trump. If the 25% tariffs that have been proposed really become a reality, then Volksaagen, as well as other car companies, could find themselves in huge trouble.

Volkswagen warns that Donald Trump’s proposed 25% tariff on Mexican car imports could harm consumers and the global auto sector, risking a new North American trade war.

U.S. President Trump said he could impose 25% tariffs on Canada and Mexico from Feb. 1, sending shares of several Asian automakers and battery firms lower in trading on Tuesday.

Osamu Inoue, president of Sumitomo Electric, which makes parts for Volkswagen, Toyota and Stellantis, among others, said Trump’s threatened 25 per cent tariffs on Mexican goods would do more harm to US suppliers, which account for almost a third of car parts investment in Mexico.

Discover how proposed tariffs on imports from Mexico could affect Volkswagen's operations and the global automotive industry as a whole.

President Trump suggested a 25 percent tariff on Canada and Mexico, which could greatly impact the many popular vehicles built in those countries.

The German carmaker is already contending with a sales slowdown, high costs, and competition from cheaper Chinese competitors. View on euronews