Audi has said it will spend $4bn (£3bn) to build its first factory in the US, as its parent company Volkswagen struggles with the impact of high tariffs imposed by Donald Trump. The German brand’s CEO, Gernot Döllner, joined Trump on stage at a campaign rally Saturday night to announce the factory in Macon, Georgia, in an unusual move by a major European brand just days before the U.S. midterm elections. The Republican Party under Trump is trying to retain control of both houses of Congress, but is performing poorly in polls as it struggles with higher fuel prices caused by Trump’s war against Iran, as well as his trade war against some of the United States’ largest trading partners. Trump has long tried to convince voters that his tariffs are helping to increase the number of manufacturing jobs in the United States, and he has seized on any new investment in factories. However, vehicle and parts employment in the United States has fallen since Trump took office last year. Audi, Volkswagen’s biggest premium brand, has suffered from Trump’s 15% tariffs on EU imports, as well as the president’s efforts to cut sales of battery-electric vehicles in favor of gasoline cars. It said it aims to build 200,000 SUVs at the new US factory, creating 4,500 jobs. The factory will manufacture the Q7, Q8 and Q9 SUVs, moving part of the production from Bratislava, in Slovakia. Volkswagen has said Trump’s tariffs cost it up to €5bn (£4.2bn) a year, before the impact of lower sales. The German manufacturer said this month it was still struggling with “continued high pressure from import tariffs.” The automaker was also forced to move some production of its cheaper cars, such as the Jetta sedan and Taos SUV, from Mexico to the United States. The new factory may raise tensions in Germany, where Volkswagen has begun cutting up to 100,000 jobs and closing factories. He has blamed the job losses on intense competition from Chinese automakers, as well as tariffs and the need to invest heavily in the shift to electric vehicles for markets other than the U.S. Döllner said he accepted the invitation to speak at Trump’s rally out of respect for the U.S. “The largest, most premium SUVs, and we will produce them here in Macon, Georgia,” he said at the event. “This is a long-term investment because we believe in the American market.” Volkswagen CEO Oliver Blume told investors in July that “US tariffs create a significant burden and restrict international trade.” However, the group has said there is still demand in the US for Audi’s large petrol SUVs, and it is planning its largest SUV to date, the Q9, with the US market in mind. Large gasoline SUVs have played a major role in global carbon emissions.
