AsianFin — U.S. tariffs on auto imports have already cost Volkswagen several billion euros this year, the company’s chief executive Oliver Blume said Monday, warning that the financial strain is particularly acute for its luxury Porsche brand.

“Up to now, it’s several billion euros on our balance sheet that this situation costs this year,” Blume told Reuters during the IAA Munich auto show.

Volkswagen, Europe’s largest carmaker, has been hit hard by ongoing tariffs that currently stand at 27.5% on vehicles imported into the United States. Like many rivals, the company has been waiting for the duties to be lowered to 15%, a change that has yet to materialize.

The steep tariffs have been especially painful for Porsche and Audi, both of which have no production facilities in the U.S. “Porsche is being squeezed in a sandwich of duties and a weak Chinese market,” Blume said.

While tariffs have already eroded earnings, Blume stressed that what matters more is how the trade environment evolves. He said Volkswagen is engaged in ongoing discussions with the U.S. government about potential tax breaks for planned investments, signaling that the company is weighing ways to offset current and future costs.