Mercedes-Benz Faces 68.7% Profit Drop Amid US Tariff Challenges

Mercedes-Benz has reported a significant decline in profits for the second quarter, primarily due to the impact of US tariffs and declining sales in key markets such as China and the United States. The company announced a net profit of 957 million euros, marking a drop of 68.7 percent compared to the previous year. Total revenue also fell by 9.8 percent to 33.15 billion euros, with sales in China decreasing by approximately 19 percent.

The tariff policies imposed by the United States have posed substantial challenges for Mercedes-Benz, prompting the company to adjust its business forecasts downward. In response, Mercedes-Benz has launched a cost-saving program aiming to bolster profitability and sales in the coming years. The company anticipates a revenue lower than the previous year and expects a significant decrease in its operating profit (EBIT).

The repercussions of these tariffs are not limited to Mercedes-Benz alone. The broader automotive industry, including companies like Porsche, is experiencing similar setbacks. Porsche reported a 71 percent drop in profits for the first half of the year due to various challenges, including tariffs. As a result, they are planning to counter the tariff impacts with strategic measures like price adjustments.

The economic strain extends beyond the auto industry, affecting other sectors such as sportswear. Adidas, for example, faces increased costs from US tariffs but remains optimistic about its annual performance, maintaining its forecast for double-digit revenue growth.

Overall, the current trade environment between the EU and the US presents a complex landscape for businesses. While some see potential consumer benefits from reduced tariffs, the broader economic impact on exports and profitability remains a concern. The situation underscores the intricate balance companies must navigate amid shifting global trade policies.