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BMW Faces €1 Billion Hit in 2025 from U.S. and EU Tariffs

The German automaker warns of intensified trade tensions and declining profits as global markets react to new tariffs and weak demand in China.

Volkswagen vehicles are seen, on the day of the annual Volkswagen Group press conference in Wolfsburg, Germany March 11, 2025. REUTERS/Liesa Johannssen
The BMW Vision Neue Klasse electric vehicle is displayed at the Beijing International Automotive Exhibition, or Auto China 2024, in Beijing, China, April 25, 2024. REUTERS/Tingshu Wang/File Photo
Even Tesla Is Getting Nailed By The 'Bipolar Tariff Regime': Critical Materials
A 2024 BMW M240i xDrive Couple

Overview

  • BMW expects a €1 billion ($1.1 billion) impact on its 2025 earnings due to U.S. and EU tariffs, particularly affecting vehicles imported from China and Mexico.
  • CEO Oliver Zipse described the estimate as conservative but expressed optimism that not all tariffs would remain in place for the entire year.
  • The company reported a 37% drop in 2024 profits, citing weak demand in China, supply chain issues, and brake problems as key challenges.
  • European officials criticized U.S. tariff policies, with French and German central bank leaders warning of economic consequences for both the U.S. and global markets.
  • The EU's trade chief is scheduled to discuss the escalating trade conflict with U.S. officials, as businesses and markets face growing uncertainty and reduced investment.