autoevolution
 

Daimler Confirms Trump’s China Tariffs Will Cost it Money

In the past few months, American president Donald Trump declared an all-out economic war on the world. The U.S. is trading tariffs fire with China, the European Union and possibly Canada.
Daimler facility in Tuscaloosa 1 photo
Photo: Daimler
There are countless sectors of the global economy affected by Trump’s decisions to impose various increases in tariffs, including the automotive one. Indirectly, the increased tariffs will affect the financial outcome for 2018 for European carmakers doing business in China as well.

There are a number of European carmaker’s that are selling cars in China via the U.S., including Daimler. Cars manufactured in North America were up until recently sold on the Chinese market at lower tariffs. According to CNN, citing figures from the German carmakers’ association, BMW, Daimler and Volkswagen had a combined output of 804,000 cars last year.

On Thursday, Daimler became the first company of the three to admit that Trump’s increased tariffs, or more precisely the Chinese response to them, would cost it some money.

In an official statement, Daimler said it will sell fewer than expected SUVs and at the same time it would have higher than expected costs.

“From today's perspective, the decisive factor is that, at Mercedes-Benz Cars, fewer than expected SUV sales and higher than expected costs - not completely passed on to the customers - must be assumed because of increased import tariffs for US vehicles into the Chinese market,” Daimler said in a statement.

“This effect cannot be fully compensated by the reallocation of vehicles to other markets.”

As a result of this, the company has revised its EBIT expectations for the main divisions, expecting 2018 to be less lucrative. As per its calculations, EBIT for the Cars division is to be slightly below the previous year, while for the Vans one significantly below the previous year's level.

In 2017, Daimler’s operating profit was nearly 2 billion euros ($2.4 billion) higher than in 2016.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram X (Twitter)
About the author: Daniel Patrascu
Daniel Patrascu profile photo

Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
Full profile

 

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories