Mercedes-Benz CEO to Trump: "We Are an American Company Too" on Tariff Concerns

Mercedes-Benz is preparing for potential tariffs proposed by former U.S. President Donald Trump by cutting production costs and accelerating electric and hybrid vehicle development. Despite being headquartered in Germany, the luxury automaker emphasizes its deep ties to the U.S. economy and workforce.

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Mercedes-Benz Defends U.S. Presence Amid Tariff Threats

Mercedes-Benz CEO Ola Källenius has a clear message for the Trump administration: Mercedes-Benz is not just a German company—it is an American company too.

Speaking on a video call with reporters on Thursday, Källenius underscored the automaker's long-standing commitment to the U.S. "Yes, our headquarters are in Germany, but we feel American. I spent six years working in the U.S., and my children were born there," Källenius said.

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He also highlighted Mercedes-Benz’s significant investments in the United States. The automaker employs over 11,000 people across two major plants—one in Tuscaloosa, Alabama, and another in South Carolina. The Tuscaloosa plant, in particular, plays a vital role in Mercedes-Benz’s global supply chain, with two-thirds of its vehicles being exported to international markets, including Europe.

"We are prepared to continue investing billions and expanding our footprint in the United States," Källenius emphasized, urging U.S. policymakers to consider their role in the country's industrial landscape.

Trump’s Proposed 25% Auto Tariff Raises Industry Concerns

The automotive industry faces fresh uncertainty as Donald Trump signals a potential 25% tariff on imported vehicles. If implemented, these tariffs could severely impact both domestic automakers like General Motors (GM) and Ford (F), as well as international companies like Mercedes-Benz.

For Mercedes-Benz, the U.S. is a crucial market. Out of the 374,000 vehicles it sold in the country last year, more than half were imported. According to the German auto association VDA, 13% of German vehicle exports head to the U.S., making it the largest international destination for German cars.

VDA president Hildegard Müller criticized the tariff proposal, calling it "the wrong negotiating tool." Industry leaders worry that such tariffs could disrupt global supply chains, raise consumer prices, and damage both American and international economies.

Auto Executives Warn of Economic Fallout from Tariffs

The possibility of prolonged tariffs has sparked concern across the auto industry, with several executives warning about the broader economic consequences.

At an investor conference, GM CFO Paul Jacobson cautioned that sustained tariffs could force automakers to reconsider plant locations and future investments. "If these tariffs become permanent, there are serious decisions to be made about where to allocate resources and whether to relocate production facilities," he said.

Ford CEO Jim Farley echoed similar concerns during an earnings call, warning that a 25% tariff on Canadian and Mexican vehicle imports could wipe out billions of dollars in industry profits and raise costs for consumers. "If these tariffs last, it would severely impact U.S. jobs and drive up car prices," Farley said.

Mercedes-Benz Struggles with Financial Pressure

The tariff threat comes at a challenging time for Mercedes-Benz, as the company faces declining sales and profitability. In 2024, the automaker reported a 4.5% drop in revenue to €145.6 billion. Meanwhile, operating profits fell by 31% to €13.6 billion, with the passenger car division seeing a steep 40% decline due to weakening demand in China.

In response, Mercedes-Benz announced plans to cut production costs by 10% by 2027 while ramping up the development of electric and hybrid vehicles to boost future growth.

Despite these efforts, the company expects unit sales to fall to 1.98 million in 2024—below market estimates of 2 million. Operating margins are also projected to drop to between 6% and 8%, down from 12.6% the previous year.

Mercedes-Benz Pushes for Continued U.S. Growth

Despite financial headwinds and the looming threat of tariffs, Källenius reaffirmed the company’s long-term commitment to the U.S. market.

"We are dedicated to growing our footprint in the United States," he stated, pointing to ongoing investments in manufacturing, employment, and new technologies.

Mercedes-Benz emphasizes its U.S. investments and workforce while preparing for potential tariffs under Trump’s trade policies.

Also Read: Trump to Implement Reciprocal and Auto Tariffs in April; Steel and Aluminum Tariffs Coming in March