Mercedes-Benz has rejected an approach from the Trump administration to move its headquarters from Stuttgart to the United States, according to comments by the company’s chief executive, Ola Källenius, in an interview with the German outlet The Pioneer.
The overture was made by Howard Lutnick, now US Commerce Secretary, during a meeting in New York roughly a year earlier, before he was nominated for cabinet office. Källenius said he declined, arguing that while Mercedes is a global group with major overseas operations, it could not be “uprooted” from its German base.
The episode has attracted attention because it frames the transatlantic contest for investment in unusually direct terms: not only attracting new factories, but seeking to relocate the strategic centre of a flagship European manufacturer. Lutnick, a longtime Wall Street executive and head of Cantor Fitzgerald, has been a prominent advocate of industrial policy built around incentives and tariffs, and took office as Commerce Secretary in February 2025.
Källenius used the story to make a broader point about Europe’s competitiveness. In the Pioneer interview, he argued that capital allocation is shaped by a contest between jurisdictions, and that Europe must treat investment attraction as a competitive field rather than an assumption.
His remarks land amid ongoing concern in Brussels and national capitals about structural disadvantages for European manufacturing, especially energy costs. The European Commission’s competitiveness report authored by Mario Draghi identified a persistent energy price gap between Europe and the United States, driven by resource endowments as well as shortcomings in European market design and infrastructure.
For German industry, the loss of Russian pipeline gas after Russia’s full-scale invasion of Ukraine in 2022 accelerated a shift to alternative supplies, while wholesale and industrial power costs became a central factor in investment decisions. Draghi’s report explicitly links the energy price differential with Europe’s wider challenge in attracting and retaining energy-intensive production.
Taxation is another element frequently cited in corporate location debates. The US federal corporate income tax rate is 21 per cent. Germany’s corporate tax burden varies by municipality because of trade tax, but official investment guidance describes the national average combined rate as around 30 per cent.
Regulation is harder to quantify, but it is increasingly discussed by executives alongside energy and tax. Källenius’s message to European policymakers, as reported by Reuters and the Financial Times, was that the United States presents investors with a straightforward business case combining lower energy costs, simpler regulation, and a more favourable tax environment.
The relocation request comes as European carmakers manage a second set of pressures: trade policy risk and the cost of restructuring supply chains. Trump has repeatedly signalled that tariffs will be used to push production onshore. In parallel, manufacturers with global supplier networks face exposure even when they assemble vehicles in the US, because content rules and parts sourcing determine the tariff impact.
Mercedes already has a substantial American footprint. Its Tuscaloosa operation, Mercedes-Benz U.S. International, was founded in 1995 and has produced vehicles since 1997, with a large share of output exported. The company has also expanded US production plans. In May 2025, Mercedes said it would add production of the GLC SUV for the North American market at its Alabama plant, shifting that model’s regional supply away from Bremen while keeping Bremen’s overall output aimed at markets outside North America.
Volkswagen has offered a more cautious public line on major new US outlays absent tariff clarity, with its management warning that additional investment can be difficult to justify if trade barriers remain elevated. That tension—between maintaining access to a high-margin consumer market and avoiding policy-driven cost shocks—sits behind much of the industry’s current capital allocation debate.
Mercedes marks 140 years since Karl Benz filed a patent for a motor vehicle in January 1886, a milestone often used by the company to underline its historical roots. The headquarters question therefore carries symbolic weight beyond balance sheets: location signals identity as well as governance, research priorities, and political alignment.
No official US government account of the conversation has been published, and the Trump administration has not provided a detailed public readout. What is clear from Källenius’s account is that the pitch was explicit, and that European executives are increasingly willing to reference such approaches publicly to underline the pressure on Europe’s industrial base.
For Brussels and Berlin, the practical issue is not whether a century-old manufacturer will shift its registered office overnight, but whether Europe can narrow the gap in energy costs, improve the predictability of regulation, and keep investment decisions anchored in the EU as the United States intensifies its campaign for industrial capacity.
