Trump's car tariffs cost Mercedes $420 million – Media

The ongoing trade dispute between the United States and Europe over automotive tariffs continues to create uncertainty for car manufacturers. Automaker Mercedes-Benz has called on the administration of White House chief Donald Trump and the European Union to conclude a trade agreement and reduce tariffs on directly imported cars, writes UNN with reference to AutoBlog.

DetailsCurrently, European car manufacturers face a significant tariff of 27.5%, although the US agreed on July 27 to reduce it to 15% after the EU cut import duties on American goods.

In an interview with Bloomberg, Mercedes-Benz Group AG Chief Technology Officer Markus Schäfer warned that without a permanent resolution, automakers risk further price increases or production changes, potentially affecting jobs and industrial output in Europe.

The situation has a serious impact. We hope that both sides will find a solution within the next few weeks. It is absolutely necessary

Mercedes-Benz faced significant difficulties in the second quarter of 2025, in addition to the typical challenges associated with slowing global demand. The German luxury car manufacturer reported global sales of 453,700 vehicles, down 9% from last year. In the US, the second largest market, the decline was even greater – 12%.

According to the company, the tariff dispute alone cost Mercedes-Benz $420 million in quarterly profit. Additional tariffs led to higher prices on labels, while reducing profit margins, which is a particular problem as competitors like BMW benefit from local production advantages.

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Mercedes-Benz joins other automakers caught between Trump’s tariffs and China’s restrictions on rare earth exports. Schäfer acknowledged the challenges posed by Beijing’s restrictions on minerals essential for electric motors and advanced components. China, the world’s leading processor of these materials, recently tightened export controls.

With the help of our Chinese suppliers, we have managed to avoid disruptions thanks to buffer stocks and alternative suppliers, but we cannot guarantee this forever

The EU has begun to lift tariffs on US industrial goods, providing “preferential market access” to products such as seafood and agricultural materials. In return, the US will reduce EU automotive tariffs from 27.5% to 15%.

In February 2025, President Trump stated that the European Union was “created to cheat the United States,” intensifying his rhetoric against the 27-nation bloc. He linked proposed trade measures to addressing the US-EU goods trade deficit, which, according to US Census Bureau data, reached $235 billion in 2024.

AdditionThe European car market showed the largest growth in 15 months, increasing sales by 5.9% in July. The growth is driven by demand for hybrid and electric vehicles, while Tesla is losing market share.