Porsche and Mercedes are likely to be the most impacted by Donald Trump’s new 25% tariffs on imported vehicles, according to a new analysis. Specialists at Bloomberg Intelligence stressed the brands could be slapped with a hefty £2.8billion blow ($3.7 billion) due to the new rule.
The experts stress that the policy could even wipe out around a quarter of the two brands’ projected 2026 operating earnings. Porsche could be left seriously exposed with the German manufacturer not operating any factories in the United States. It means U.S. Porsche dealers are entirely reliant on imports which will now come within a 25% tariff.
German brands noticed a sharp drop in their share price shortly after the news was delivered by the President.
Porsche and Mercedes shares fell by up to 5.7% with BMW down 4.9% and Volkswagen AG declining by 4.3%.
Germany’s VDA cars lobby stressed the new tariffs were a “fatal sign for free and rules-based trade”.
Analysis from the group found that 844,000 vehicles imported in the last year were made by German car manufacturers.
However, analysts have stressed it was still too early to determine the full impact of tariffs on profit margins at this stage.
Carsten Brzeski, head of macro at ING Research said: “We still need to do a bit of the number crunching – but there is no real data. We don’t know the price preference of US customers for Porsche or Mercedes.”
Brzeski added: “Will these tariffs now be the final drop, bringing a certain German car manufacturer down on its knees? No, Is it going to be painful? Sure.”
Defiant German economy minister Robert Habeck also hit back, stressing that the European Union must “respond firmly” to the news.
He said: “It must be clear that we will not give in to the US. We need to show strength and self-confidence.”
U.S. President Donald Trump confirmed the tariffs in a media briefing at the White House on Wednesday afternoon.
Mr Trump stressed the new import tariffs would come into effect from April 2 with fees slapped on car parts from later this Spring.
The President said: “We’re going to charge countries for doing business in our country. Taking our jobs, taking our wealth.
“They’ve taken so much out of our country, friend and foe. And frankly, friend has often times been much worse than foe.”
Express.co.uk have contacted Mercedes and Porsche UK for comment.