Mercedes-Benz Welcomes EU-US Deal After Profits Plunge On Tariff Woes

Published: Wednesday, July 30, 2025 at 9:15 am

Mercedes-Benz Welcomes New Trade Deal Amidst Tariff-Induced Profit Plunge

Mercedes-Benz has expressed optimism regarding a new trade agreement between the United States and the European Union, despite acknowledging its potential imbalances. The German carmaker's positive outlook comes after reporting a significant financial hit due to tariffs imposed by the United States.

Chief Executive Ola Kaellenius praised the efforts of the EU Commission, stating the deal "will help us rather than damage us." The agreement, announced by US President Donald Trump and EU Commission President Ursula von der Leyen, reduces the US tariff on imported cars to 15 percent, down from 27.5 percent.

Mercedes-Benz highlighted the impact of the tariffs, which cost the company hundreds of millions of euros in the second quarter. The firm's car business would have achieved a profit margin of 6.6 percent without the tariffs, compared to the actual 5.1 percent, on sales of 24.2 billion euros. Overall net profit plummeted nearly 70 percent to 957 million euros, also impacted by weak sales in China. This prompted Mercedes-Benz to lower its full-year revenue outlook, now forecasting groupwide revenue to be "significantly below" the 146 billion euros earned last year.

The company's sales volume in the United States fell by 12 percent during the period. In China, sales tumbled by 19 percent, reflecting the challenges Mercedes-Benz faces against local competitors. The carmaker had previously withdrawn its guidance in April due to the impact of the tariffs. Mercedes-Benz now forecasts a profit margin of between 4 and 6 percent at its key cars division, including the effects of tariffs, and between 6 and 8 percent excluding tariffs.

BNN's Perspective: While the new trade deal offers some relief, the situation underscores the volatility of global trade and its impact on major industries. The reduction in tariffs is a positive step, but the long-term effects of protectionist policies and shifting market dynamics remain uncertain. Companies like Mercedes-Benz must adapt to these changes, focusing on strategic production and market diversification to navigate the evolving landscape.

Keywords: Mercedes-Benz, tariffs, trade deal, EU, US, profits, sales, revenue, car industry, Donald Trump, Ola Kaellenius, profit margin, China, import, export

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