(Bloomberg) — President Donald Trump’s tariffs prompted several of Europe’s largest automakers to scrap financial guidance, underlining the extent of the chaos unleashed by his fast-changing trade tactics.
Jeep owner Stellantis NV and Germany’s Mercedes-Benz Group AG on Wednesday withdrew their forecasts for this year citing the duties, which are upending supply chains and driving up the prices of cars around the world. Volkswagen AG left its outlook largely unchanged but warned it didn’t factor in the impact of the levies.
The volatility sparked by the duties “is too high to reliably assess” business development this year, Mercedes said. The luxury-car maker warned that operating earnings, cash flow and margins would be hit if the current trade hurdles persist.
European carmakers have struggled to tally the impact of the tariffs as the Trump administration continues to change its position, following up initial threats of tough new levies with caveats, exemptions and delays.
The president signed directives on Tuesday to lift some duties on foreign parts and prevent multiple levies from stacking on top of each other. While the move is expected to ease the burden, major questions — including whether the US will reach a trade deal with China — remain unanswered.
Aston Martin Lagonda Global Holdings Plc on Wednesday announced plans to limit shipments of its luxury cars to the US and use up existing stock held by its dealers there to soften the tariff blow.
Shares of Mercedes, Volkswagen and Aston Martin declined in early Wednesday trading. Stellantis rose as much as 1.4% in Milan.
Mercedes, which operates a factory in Tuscaloosa, Alabama, is considering shifting another vehicle model to the US to counter the duties. The company currently ships Europe-made vehicles to North America while also producing cars in the US that are sold locally and exported to markets including China.
The trade hurdles add to problems the industry faces including muted demand in Europe, high production costs and rising competition in China, where local carmakers led by BYD Co. are taking over.
Earlier this week, Porsche AG — one of the carmakers most exposed because it doesn’t have a factory in the US — lowered its profit outlook and warned it’s unable to estimate any tariff impacts from June. Volvo Car AB pulled its guidance and announced plans to slash costs by nearly $2 billion amid the duties and uneven demand for electric vehicles.
–With assistance from Monica Raymunt and Jamie Nimmo.
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