Mercedes-Benz has today trimmed its annual car sales and profit margin forecasts, flagging a nearly $420m impact from US tariffs in the second quarter as US President Donald Trump prepared to hike import levies on EU-made cars.
The German luxury carmaker said it expects a profit margin of 4% to 6% for its car business this year and annual group revenue “significantly below” 2024 levels, both for its cars and vans, factoring in the impact of tariffs.
The firm had said in February, before Trump’s tariff salvos started, that it expected a profit margin for its car division of 6-8% this year, after a slump in its car business in 2024. It withdrew that guidance in April.
The results reflect the wider repercussions of Trump’s tariff policy, which has seen European carmakers hit with higher US import taxes this year. Volkswagen’s luxury brand Porsche also cut its full-year profitability target today.
The US struck a framework trade agreement with the EU on Sunday, imposing a 15% import tariff on most EU goods, half the threatened rate, averting a bigger trade war between the two allies that account for almost a third of global trade.
Mercedes said that the tariff impact on the division’s adjusted operating profit (EBIT) margin in the second quarter had been 150 basis points. That amounted to some €362m, according to a Reuters calculation.
Prospects of extra car sector-specific tariff deals with the US are “very uncertain,” Mercedes CEO Ola Kaellenius told analysts today, throwing some cold water on hopes firms may be able to negotiate individual deals.
Mercedes is among the most significant beneficiaries of the US-EU trade deal due to its greater share of imports into the US from Europe than from Mexico or Canada. The latter two still face higher US import tariffs.
The German firm also produces cars in its US plant of Tuscaloosa, Alabama, and is among the largest car exporters from the US into Europe.
The company’s second-quarter adjusted operating income more than halved to €1.99 billion.
The impact of tariffs, efficiency measures and a €750m impact from the sale of a plant and restructuring in Argentina lowered its reported EBIT, or operating profit, even further to €1.27 billion, it said in a statement.
Its revenues dropped 9% to €33.15 billion on lower car and van sales, as well as the impact of tariffs.
Unit sales in China decreased by 10% and 19% respectively in the first and second quarters of 2025 compared to last year, it had said earlier this month.
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