Mercedes‑Benz embraces EU‑US pact amid tariff‑tory profit slump

Mercedes‑Benz Acknowledges WTO Tariff Fallout, Welcomes US‑EU Accord

Mercedes‑Benz has reported that the United States’ 27.5 percent car tariff, imposed by President Donald Trump, inflicted a hit of hundreds of millions of euros on the German automaker during the second quarter. In a conference call, CEO Ola Kaellenius expressed confidence that the recently signed United States‑European Union trade deal would be advantageous rather than detrimental to the company.

Key Elements of the US‑EU Trade Agreement

• Tariff on US‑imported cars reduced from 27.5 percent to 15 percent.
• EU’s baseline tariff on US goods remains zero, a point of contention for European critics.
• Mercedes‑Benz’s US plant in Tuscaloosa exports roughly two‑thirds of its production, Kaellenius emphasized the firm’s intent to expand production where it is most economical.

Strategic Outlook for the Next Five to Ten Years

Kaellenius noted the necessity of a thoughtful, long‑term review of the company’s global footprint. He reaffirmed that reactivity to tariff changes should be tempered by strategic planning.

Impact on Mercedes‑Benz’s Financial Performance

Mercedes‑Benz’s second‑quarter results reveal a 70 percent drop in overall net profit to 957 million euros, largely attributable to tariff impacts and stalled sales in China. The company’s car division recorded sales of 24.2 billion euros, with an actual profit margin of 5.1 percent compared to a pre‑tariff margin of 6.6 percent.

Revised Revenue Projections

• Groupwide revenue forecast now “significantly below” last year’s 146 billion‑euro figure.
• Full‑year revenue outlook lowered in light of tariff effect and weak China sales.

Profit Margin Forecasts Amid Tariff Adjustments

Mercedes‑Benz’s car division now projects a profit margin of 4 – 6 percent, inclusive of tariff influences. Excluding tariffs, the expected margin lies between 6 – 8 percent.

Broader Industry Repercussions of Trump’s Tariff Policy

The US 25‑percent tariff introduced in April has cast a shadow over European carmakers, with Stellantis, Volkswagen, and Mercedes‑Benz reporting declining North American sales. Mercedes‑Benz’s US volume fell 12 percent, while sales in China dropped 19 percent, underscoring competition from local firms such as BYD.

In April, auto firms withdrew their full‑year guidance to digest the tariff effect. Mercedes‑Benz reinstated a guidance range of 4 – 6 percent profit margin, offset by tariff influence, while excluding tariffs it anticipates 6 – 8 percent margin.