Daimler Says Trump Tariffs Will Hurt China Business
Higher tariffs on imports of U.S. vehicles into China will result in “fewer-than-expected (Mercedes-Benz) SUV sales and higher-than-expected costs – not completely passed on to the customers,” Daimler says.
July 19, 2018
Daimler says President Donald Trump’s escalating trade war will hit its profits because Mercedes-Benz SUVs made in the U.S. will be hit with tariffs when they are exported to China.
The German automaker says because of recent developments it has reassessed its earnings potential for 2018. Those developments include tariffs imposed by China in retaliation for U.S. tariffs on Chinese steel and aluminum.
“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 U.S. vehicles into the Chinese market,” Daimler says.
This effect cannot be fully compensated by the reallocation of vehicles to other markets, it says.
As a result, Daimler projects this year’s earnings before interest and taxes for Mercedes-Benz Cars will be slightly below those of the previous year.
Daimler says another negative effect on earnings can be expected in second-half 2018 from the new Worldwide Harmonized Light Vehicles Test Procedure certification process.
In addition, earnings at Mercedes-Benz Vans will be significantly below last year’s because of recalls of diesel vehicles. Earnings at Daimler Buses will be negatively affected by declining demand in Latin America.
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