BMW accuses rival carmakers of overreacting to Trump tariffs

Telegraph

2 days ago

BMW has accused rival carmakers of overreacting to Donald Trump's tariffs on US imports, amid mounting discontent with the EU's trade deal with Washington.
Oliver Zipse, the company's chief executive, claimed competitors such as Volkswagen, Mercedes-Benz and Vauxhall owner Stellantis were being overly pessimistic about the costs of the American levies this year.
Speaking on Thursday, Mr Zipse said: 'I think this tariff discussion is way exaggerated and also its effects on the industry.
'What's more important is the question, are the products attractive?'
His comments are a departure from the mood among executives and politicians in Europe, where governments have expressed dismay at the concessions made by Brussels in talks with Mr Trump.
A string of BMW's rivals have already warned that the costs of tariffs this year will cumulatively run to billions of euros, leading them to downgrade their profit forecasts.
Under the US-EU trade deal, Washington has agreed to lower tariffs on European cars to 15pc from 27.5pc – although this is still far above the 2.5pc rate charged before Mr Trump put the levy up in April.
Stellantis said this week it expected to pay €1.5bn (£1.3bn) this year, while Mercedes-Benz and Porsche put their costs at €362m and €400m respectively for the first six months of 2025.
BMW is also facing a potential hit of €1.5bn from tariffs this year, according to analysts.
But the company said the cost of US tariffs overall would largely be mitigated by the EU's concession to Mr Trump of lowering tariffs from 10pc to zero on American cars shipped to Europe.
Large numbers of cars made at BMW's plant in South Carolina – its biggest globally – are shipped to Europe, including its X-series SUV.
British car companies favoured
BMW also sells its luxury cars for much higher price tags than mass-market producers such as VW and Stellantis, giving the company bigger profit margins and more room to absorb the hit from tariffs.
However, the carmaker's bullish view of tariffs is not shared by some European governments, who are unhappy about the trade deal.
France has been leading the backlash, with François Bayrou, the prime minister, warning the deal represented a 'dark day' for the Continent on Monday.
Emmanuel Macron, the French president, also said the EU had not been 'feared' enough during talks with the US and pledged to be tough in follow-up negotiations, according to local media reports.
'It's not the end of it,' Mr Macron is said to have told ministers.
British carmakers have also raised concerns about the trade deal struck by the UK and US, amid warnings it risks leaving smaller manufacturers at a disadvantage.
On Wednesday, Aston Martin claimed Sir Keir Starmer's agreement with Mr Trump would favour Jaguar Land Rover (JLR) – the UK's biggest carmaker – in its current form because of a quota limiting tariff-free exports to 100,000 cars per year.
JLR accounted for three quarters of the 100,000 cars exported by British companies to the US last year.
Adrian Hallmark, the Aston Martin chief executive, warned that changes to the UK-US agreement were urgently needed 'so we don't get squashed and so that it doesn't become a JLR tariff agreement'.