Mercedes-Benz Faces Financial Risks from Proposed U.S. Auto Tariffs

The luxury automaker warns of significant profit impacts while emphasizing its commitment to U.S. investment and production.

President Trump has proposed a 25% tariff on auto imports, which could significantly affect automakers, including Mercedes-Benz.
Mercedes CFO Harald Wilhelm warned that even a smaller tariff increase could reduce the company's operating margin, potentially costing over $1 billion annually.
To mitigate risks, Mercedes-Benz plans to increase local production in key markets, including the U.S., aiming to raise localized production from 60% to 70% by 2027.
CEO Ola Källenius highlighted Mercedes-Benz's deep ties to the U.S., with substantial investments, thousands of jobs, and a major export footprint from its Tuscaloosa, Alabama plant.
Auto industry leaders, including executives from Ford and GM, have expressed concerns over the financial and operational challenges posed by fluctuating trade policies and tariffs.