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President Trump’s new 25% import tariffs on foreign cars are poised to deal a major financial hit to Germany’s top carmakers — with Porsche AG and Mercedes-Benz Group AG taking the brunt of the impact.
What’s Happening:
New tariffs take effect April 3, potentially slashing around 25% of Porsche and Mercedes’ 2026 projected operating earnings, according to Bloomberg Intelligence.
The estimated hit: €3.4 billion (US$3.7 billion or RM16.2 billion).
Automakers may have to raise prices or shift more production to the US to absorb the blow.
Market Reaction:
Porsche shares fell 5%, Mercedes down 5.2%, BMW -4.9%, Volkswagen -4.3%, and Aston Martin tumbled 8.9% in London.
The tariffs threaten Europe’s export-heavy auto industry, particularly German brands, which ship a large portion of their high-margin vehicles like the Porsche 911 and Mercedes S-Class to the US.
Industry Concerns:
VDA (Germany's auto lobby) slammed the move as “a fatal sign for free and rules-based trade”, urging the EU to negotiate with the US.
Parts suppliers like Robert Bosch GmbH and Continental AG are also at risk.
Porsche, with no factories in the US and falling sales in China, is especially exposed as the US has become its No.1 market.
The Bigger Picture:
Most German automakers have US plants, but luxury models are still primarily imported.
A trade war escalation could worsen conditions for an industry already battling rising costs and soft demand.
The tariffs disrupt global supply chains and hurt consumers, especially those in North America, said VDA president Hildegard Müller.
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