Mercedes will make another model in U.S. to counter tariffs
(Bloomberg) — Mercedes-Benz Group AG plans to move production of another vehicle to the U.S. as President Donald Trump's tariffs raise costs and threaten to make imported cars uncompetitive.
Article content
Article content
The German automaker said in a statement that it will shift assembly of a 'core segment vehicle' to its factory in Tuscaloosa, Alabama, by 2027. Though Mercedes didn't specify which model, its most popular import in that category is the GLC sport utility vehicle, which sold 64,163 units in the US last year.
Article content
The shift suggests that Trump's campaign to bring more manufacturing to the U.S. by imposing new tariffs is having some success, even as rapid-fire policy changes take a toll on financial markets, business planning and the economy. Overall US manufacturing activity shrank in April by the most in five months, according to the Institute for Supply Management's factory gauge.
Article content
Article content
Trump earlier this week signed a pair of directives easing the impact of his tariffs on the automotive industry following weeks of lobbying. A basic 25 per cent levy remains in place, and the toll on the industry is growing. General Motors Co. on Thursday cited an exposure of as much as $5 billion, though that would've been far bigger without the latest relief measures.
Article content
Mercedes and Jeep owner Stellantis NV have withdrawn their financial forecasts for this year, citing the duties. Volkswagen AG has left its outlook largely unchanged but warned it isn't yet factoring in the impact of the levies. UK automaker Jaguar Land Rover paused shipments to the US following the introduction of the tariffs.
Article content
Article content
Higher Costs
Article content
Article content
As the duties upend supply chains and raise costs, some carmakers have said they'll pass those on to buyers.
Article content
Mercedes had said in April that it was considering moving some production due to added costs stemming from the duties. The company is also considering withdrawing its least expensive cars from the US because tariffs will make their sales economically unfeasible, Bloomberg reported last month.
Article content
The Tuscaloosa plant made around 260,000 vehicles in 2024, Mercedes said, including the GLE, GLS, GLE Coupe and Mercedes-Maybach GLS.
Article content
The site also makes some vehicles for export from the US, including the EQE SUV, EQS SUV and Mercedes-Maybach EQS SUV for all global markets, the carmaker said.
Article content
Mercedes touted its US presence in the statement, saying it employs more than 11,000 people in the country and works with some 400 suppliers there.
Article content
Markets were closed in Frankfurt on Thursday for a holiday. Mercedes shares have fallen 2.5 per cent so far this year amid investor concern around the effect of tariffs.
Article content
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Global News
20 minutes ago
- Global News
Speaker of U.S. House of Representatives downplays Musk's influence on Trump's tax and budget bill
With an uncharacteristically feistiness, Speaker of the United States House of Representatives Mike Johnson took clear sides Sunday in President Donald Trump's breakup with mega-billionaire Elon Musk. The Republican House leader and staunch Trump ally said Musk's criticism of the GOP's massive tax and budget policy bill will not derail the measure, and he downplayed Musk's influence over the GOP-controlled Congress. 'I didn't go out to craft a piece of legislation to please the richest man in the world,' Johnson said on ABC's This Week. 'What we're trying to do is help hardworking Americans who are trying to provide for their families and make ends meet.' Johnson said he has exchanged text messages with Musk since the former chief of Trump's Department of Government Efficiency came out against the GOP bill. Musk called it an 'abomination' that would add to U.S. debts and threaten economic stability. He urged voters to flood Capitol Hill with calls to vote against the measure, which is pending in the Senate after clearing the House. His criticism sparked an angry social media back-and-forth with Trump, who told reporters over the weekend that he has no desire to repair his relationship with Musk. Story continues below advertisement The speaker was dismissive of Musk's threats to finance opponents — even Democrats — of Republican members who back Trump's bill. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy 'We've got almost no calls to the offices, any Republican member of Congress,' Johnson said. 'And I think that indicates that people are taking a wait and see attitude. Some who may be convinced by some of his arguments, but the rest understand: this is a very exciting piece of legislation.' Johnson argued that Musk still believes 'that our policies are better for human flourishing. They're better for the U.S. economy. They're better for everything that he's involved in with his innovation and job creation and entrepreneurship.' The speaker and other Republicans, including Trump's White House budget chief, continued their push back Sunday against forecasts that their tax and budget plans will add to annual deficits and thus balloon a national debt already climbing toward $40 trillion. Story continues below advertisement Johnson insisted that Musk has bad information, and the speaker disputed the forecasts of the nonpartisan Congressional Budget Office that scores budget legislation. The bill would extend the 2017 Trump tax cuts, cut spending and reduce some other levies but also leave some 10.9 million more people without health insurance and spike deficits by $2.4 trillion over the decade, according to the CBO's analysis. The speaker countered with arguments Republicans have made for decades: That lower taxes and spending cuts would spur economic growth that ensure deficits fall. Annual deficits and the overall debt actually climbed during the administrations of Ronald Reagan and George W. Bush, and during Trump's first presidency, even after sweeping tax cuts. Russell Vought, who leads the White House Office of Budget and Management, said on Fox News Sunday that CBO analysts base their models of 'artificial baselines.' Because the 2017 tax law set the lower rates to expire, CBO's cost estimates, Vought argued, presuming a return to the higher rates before that law went into effect. Vought acknowledged CBO's charge from Congress is to analyze legislation and current law as it is written. But he said the office could issue additional analyses, implying it would be friendlier to GOP goals. Asked whether the White House would ask for alternative estimates, Vought again put the burden on CBO, repeating that congressional rules allow the office to publish more analysis. Other Republicans, meanwhile, approached the Trump-Musk battle cautiously. Story continues below advertisement 'As a former professional fighter, I learned a long time ago, don't get between two fighters,' said Oklahoma Sen. Markwayne Mullin on CNN's State of the Union. He even compared the two billionaire businessmen to a married couple. 'President Trump is a friend of mine but I don't need to get, I can have friends that have disagreements,' Mullin said. 'My wife and I dearly love each other and every now and then, well actually quite often, sometimes she disagrees with me, but that doesn't mean that we can't stay focused on what's best for our family. 'Right now, there may be a disagreement but we're laser-focused on what is best for the American people.' –with files from The Associated Press' Gary Fields
Edmonton Journal
38 minutes ago
- Edmonton Journal
Another delivery system disruption as DHL Express Canada locks out workers and union strikes
Article content Unifor says DHL Express Canada locked out workers just after midnight today as the two sides failed to reach a contract deal, injecting more labour turmoil into the country's parcel delivery market. The union, which represents 2,100 truck drivers, couriers and warehouse workers across seven provinces, says they went on strike in response at 11 a.m. ET. Unifor says the German-owned carrier is proposing to change the driver pay system and planning to use replacement workers before legislation banning them comes into effect on June 20.
Globe and Mail
44 minutes ago
- Globe and Mail
Should You Invest in Quantum Computing Stocks During the TACO Trade?
It's been a hard year for investors so far. As of market close on June 5, the S&P 500 and Nasdaq Composite indexes each have breakeven returns on the year. While this makes it incredibly difficult to make money in the stock market, there have been some pockets during which investors made out well if they chose to engage with higher-than-usual volatility. By now, you may have come across a new acronym floating around financial circles called the "TACO" trade. Below, I'll detail what this means and why it's important. From there, I'll dig into one of the new, hot areas fueling the artificial intelligence (AI) narrative: quantum computing. Could quantum computing stocks be a good way to play the TACO trade? Read on to find out. What is the TACO trade? Even though the S&P 500 and Nasdaq are both flat on the year, the image below illustrates that there have been some pronounced dips and sharp rises across both indexes throughout 2025. The catch is that these volatile movements have been incredibly fleeting. ^SPX data by YCharts The term "TACO trade" is a cheeky acronym that stands for "Trump always chickens out." Basically, whenever the President voiced some tough rhetoric on his new tariff policies, the markets plummeted. However, when he subsequently eases some of the pressure on the tariff talking points, the markets roar again. In summary, the TACO trade is simply a new version of buying the dip when stock prices become abnormally depressed. Are quantum computing stocks a good buy right now? Two of the most popular quantum computing stocks in the market right now are IonQ (NYSE: IONQ) and Rigetti Computing (NASDAQ: RGTI). During 2024, shares of IonQ soared by 237% while Rigetti stock climbed by a jaw-dropping 1,450% -- both of which completely dominated the broader market. This year has been a different story, though. As of closing bell on June 5, shares of IonQ and Rigetti Computing have plummeted by 12% and 28%, respectively. Given these declines, is now a good opportunity to buy quantum computing stocks? To answer that question, smart investors understand that valuation needs to be a consideration. Per the chart below, Rigetti Computing and IonQ boast price-to-sales (P/S) ratios that seem incongruent with the company's underlying fundamentals. RGTI PS Ratio data by YCharts Looked at another way, IonQ and Rigetti Computing have generated a combined revenue of roughly $50 million over the last 12 months -- all while posting a net loss of $460 million between the two businesses. Given the nominal sales figures and hemorrhaging losses, it's hard to justify the valuation multiples pictured above. While Rigetti and IonQ have each been on a monster run from a share price perspective, both of these companies appear to be riding high on a bullish quantum computing narrative. In other words, their trading levels are not rooted in the actual performance of the business but rather in a broader macro viewpoint that quantum computing could be a good opportunity in the long run. Keep the big picture in focus The big takeaway here is that even though shares of IonQ and Rigetti are down on the year, their respective valuations make it clear that neither of these companies is a good "buy the dip" candidate. Rather, even with their underperformance throughout the year, each stock remains overvalued. For these reasons, I would not chase any sell-offs in these quantum computing stocks as the TACO trade continues to evolve. My suspicion is that both IonQ and Rigetti will experience some continued valuation compression, and their share prices could very well keep spiraling downward. Should you invest $1,000 in IonQ right now? Before you buy stock in IonQ, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and IonQ wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to173%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025
