Porsche and Mercedes are expected to suffer the biggest wounds of all European automakers, facing a potential blow of 3.4 billion euros ($ 3.7 billion) from duties of the US president Donald Trump in imported cars.
The additional 25% of Trump’s tariffs, which will be collected from April 3, could eliminate about a quarter of Porsche and Mercedes’ scheduled operating profits for 2026, according to Bloomberg Intelligence. To compensate for the impact, manufacturers may need to raise prices or transfer more production to the US.
German automakers are more at risk, as they send more vehicles to the US than any other country, including many models with higher profit margin, such as Porsche’s 911 sports car and Mercedes S-Class Sedan.
Porsche’s shares fell up to 5% in Frankfurt, with Mercedes fell up to 5.2% and BMW declining 4.9%. Volkswagen, also owned by Audi and Lamborghini, fell up to 4.3%, while Aston Martin Lagonda Global Holdings fell 8.9% in London.
Trump’s latest move is “a fatal sign for free and rules based on trade,” the German car industry union said VDA, urging Brussels to negotiate with Washington for an agreement. In addition to Germany’s largest automakers, contributions also threaten to hit parts, such as Robert Bosch and Continental.
Most German automakers operate factories in the US, where they produce cars for both local buyers and exports. With the European Union weighing an answer, any escalation of the trade war could further harm an industry that is already struggling with increased costs and demanding demand.
Porsche, which is struggling with reduced sales in China, can be more exposed. The luxury car manufacturer has been steadily developing in the US for the last 15 years, but Porsche delegates there are entirely dependent on imports, as there is no factory there.
“Duties are significantly burdened by companies and closely intertwined global supply chains in the industry,” VDA President Hildegard Muller said. This move has “negative consequences for consumers, especially in North America,” she concluded.