Daimler was the first industrial giant to worsen sales outlook amid the flaring trade war between the US and China, Bloomberg reported citing the company’s statement. Chinese customers will now buy fewer cars after Beijing slaps retaliatory tariffs on U.S. auto imports, Daimler said in a statement Wednesday.
The manufacturer of Mercedes-Benz cars warned about a possible decline in sales in 2018 over the last year’s figures. The company calls the key factor for assessing the potential concern’s profit the need to take into account the risk of reducing sales of Mercedes-Benz SUVs and the increase in costs of its Alabama unit due to China’s increased duties on the import of American cars.
Earlier, the President Donald Trump announced levies of 25% on imported Chinese products worth about $ 50 billion a year. The Chinese authorities in response since July 6 introduce a 25% duty on imports of cars, agricultural products and other goods from the United States.
Shares of German carmakers fell on Thursday.
Daimler dropped 4.4 percent in Frankfurt. BMW, which exports vehicles to China from its plant in Spartanburg, South Carolina, slid 3.1 percent. Volkswagen AG, which has limited China-U.S. trade exposure, slipped 2.8 percent.
With the rising prospect of an all-out trade war, few industries will be spared and more companies may have to follow Daimler, experts told Bloomberg.