BMW sees 1-billion-euro earnings hit from US tariffs
FRANKFURT/WASHINGTON — German carmaker BMW said on Friday it expected tariffs to cost it one billion euros ($1.09 billion) this year, while European officials warned the US economy would be the biggest loser if President Donald Trump pursues an “idiotic” trade war.
BMW is directly in the firing line of the trade spat between Washington and the European Union, set to escalate in early April as Trump imposes “reciprocal” tariffs to match higher duty rates of EU and other countries and counteract their non-tariff trade barriers.
Trump has increased tariffs on US steel and aluminum imports and imposed a 25-percent duty on vehicles from Mexico that do not comply with North American trade deal’s rules of origin, including BMWs.
The EU, which Trump has labeled “hostile and abusive,” on trade, is in line for more US tariffs on April 2. The bloc has set plans to retaliate while calling for dialogue.
EU trade commissioner Maros Sefcovic spoke with US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer on Friday about the spiralling tariff conflict, calling it an important exchange and “a key part of better understanding each other.”
More Trump threats
The conversation comes a day after Trump responded to the EU retaliation plan by threatening to slap a 200 percent tariff on wine cognac and other alcohol imports from Europe.
BMW Chief Executive Oliver Zipse meanwhile said the company expected a one-billion-euro hit to its 2025 earnings from the newly imposed US tariffs and EU duties on its China-made electric vehicles.
He described the firm’s estimate of the impact as “conservative” but said executives did not expect all the tariffs imposed so far to remain in place for the whole year.
BMW, one of Europe’s biggest carmakers, reported a 37 percent drop in profits for last year.
The effects of a prolonged trade war could hurt US companies as well. EV maker Tesla — whose CEO Elon Musk has become a key adviser to Trump, in charge of slashing federal spending — is exposed to reciprocal actions from other countries, the company told US trade representatives in a letter on Thursday.
Tesla’s sales have suffered across Europe since Musk has stepped up his support of far-right politicians in several countries; its shares are down roughly 50 percent since mid-December.
The company sent the letter as a response to a request for comment from the USTR’s office on foreign trade practices. All told, nearly 750 comments were received by the Tuesday deadline, according to the USTR Website.
