WASHINGTON -- Volkswagen Group CEO Herbert Diess met on Monday with the top U.S. trade official, Robert Lighthizer, a week before new tariffs are set to hit imported Mexican vehicles, two people briefed on the matter said.
Last week, U.S. President Donald Trump said he would begin imposing tariffs on all Mexican made goods starting at 5 percent on June 10. The tariffs would rise from there, hitting 25 percent on Oct. 1 "unless Mexico substantially stops the illegal inflow of aliens coming through its territory," Trump said.
A spokesman for U.S. Trade Representative Lighthizer did not immediately comment.
The tariffs could cause VW significant pain.
Mexican-made vehicles accounted for nearly half of VW's U.S. sales last year. The company builds the Jetta and Tiguan among other models at its Puebla, Mexico, plant and builds engines at a plant in Silao. VW also assembles the Audi Q5, its best-selling U.S. vehicle accounting for a quarter of sales, at another plant in Mexico.
"We believe that tariffs of this kind are a tax on the U.S. consumer and will result in higher prices and also threaten job growth," VW said in a statement on Monday, adding that the company "has made significant long-term investments in the United States that would be impaired by restrictive changes to trade."
A Volkswagen of America spokesman confirmed Diess was in Washington but declined to confirm his meeting with Lighthizer.
In December, Diess was among a group of senior executives of leading German automakers who were pressed by Trump to expand their investments in the United States.
"The president has a point," Diess said in December, saying officials "tried to convince us to invest more into America and we are prepared to do this."
In January, VW said it was investing $800 million to build a new electric vehicle at its plant in Chattanooga, Tennessee. VW said it was adding 1,000 jobs at the plant and that electric-vehicle production there would begin in 2022.
Diess also said in January that the company was considering building Audi vehicles in the U.S. but that no decisions had been made.