Trump Tariffs is pushing premium auto brands to rethink selling in America
Mercedes is among manufacturers navigating a worsening trade war that risks hurting their sales and disrupting supply chains.
Even, Aston Martin Lagonda Global Holdings and Ferrari plan to raise selling prices for some of their cars in America, with Volkswagen AG considering expanding local manufacturing which is already in motion in America.
Stellantis NV’s Chairman John Elkann has met with Trump and the Chrysler parent is part of a group of automakers making a last-ditch effort to sway his decision as they have plants outside of America.
Some auto manufacturers like Jaguar Land Rover have just decided to halt all exports to America.
Meanwhile, cutting exposure to the entry-level premium market would allow Mercedes to sidestep tariffs on its least profitable vehicles. For models like the GLA and A-Class which starts at around USD43,000 in America the new higher duties (Tariffs) could turn already thin margins into losses if they are not passed on to customers.
• Two-thirds of Mercedes-Benz vehicles sold in the U.S. are imported, making them vulnerable to new 25 percent tariffs.
• Even American.-built models like the GLE and GLS SUVs will be affected, as they rely on imported engines and transmissions from Europe.
• The tariffs took effect on April 3 and has been applied to critical vehicle components sourced from outside North America.
The move may also encourage drivers to opt for more premium models. America remains a key market for Mercedes because of robust demand for the more profitable, larger SUVs there.
Under Chief Executive Officer Ola Källenius, Mercedes has been pushing further upmarket by directing resources to its most expensive models such as the S-Class sedan, while scaling back compact cars at the expense of volume.
So, with no immediate resolution in sight, Mercedes-Benz faces mounting pressures that could reshape its American operations, pricing strategy, and long-term profitability.
