Audi Stops Sending Cars To US Amid Tariff Shock

Audi’s pipeline to the US just got kinked, and not in a fun, German-engineered suspension kind of way. In a move that signals more headaches for the auto industry, the company is halting vehicle deliveries to the United States, effective immediately. The decision comes as a direct response to the Trump administration’s freshly minted 25% import tariff. For now, Audi dealers have about two months’ worth of inventory to work through. After that, it’s decision time.

On April 2, the US government imposed tariffs all over the place, including on uninhabited islands. As a part of that wide-sweeping measure, it issued a 25 % tariff on imported cars and parts. Automakers both in and outside of the USA are reeling from the move, and Audi has officially made its short-term play.

Read: Hyundai And Genesis Won’t Raise Prices Until June, Then All Bets Are Off

For the time being, it halted imports from its factories to the US. It confirmed that to Automobilwoche. Evidently, dealers are sitting on about 37,000 cars already in America. That provides roughly 60 days’ worth of inventory. Additional cars are technically here in the USA at import ports. They won’t go to dealers until further notice, though.

That makes the next few months a huge pivot point for Audi. Trump has proven time and time again that he’ll go back on his own word, so perhaps that’s the best-case scenario for Audi. Should Trump end the tariffs, or at least the auto-focused ones, Audi could go back to business as usual. If that doesn’t happen, Audi will need to go to more extreme lengths to maintain its business in the U.S.

It’s possible that it could leverage production facilities owned by the Volkswagen Group in Tennessee. Beyond that, there isn’t a quick and easy solution save for simply increasing prices to make its business profitable again. German publication Handelsblatt suggested it could use Scout’s production facility, but that’s still two years away from being functional. On top of that, Scout is going to want to make its own cars and it’ll need to ramp production slowly to ensure quality.

Whatever way this goes, almost all of the potential options will require higher prices for customers here in the USA. Sure, lots of those folks can still afford the bump, but it doesn’t bode well for the brand in the short term. Notably, Audi isn’t the only automaker facing this situation. Jaguar Land Rover is figuring out the same math problem and so far, has come up with the same answer. It halted imports to the US earlier today.