BMW is lowering its profit target for 2018 as President Donald Trump’s tariffs on Chinese goods and metals imports pinch demand.
Revenues will be “slightly lower” this year and profits will be “at least 7 percent,” down from a prior estimate of 8 to 10 percent, the company said in a statement on Tuesday, citing the “continuing international trade conflicts.”
[Related: South Carolina officials pushing for BMW plant to be exempted from tariffs]
Trump has imposed tariffs on $250 billion in Chinese imports and has threatened to place levies on all the goods the country ships to the U.S. The administration is also weighing a 25 percent tariff on auto imports, on top of separate duties on steel and aluminum.
“These circumstances are distorting demand more than anticipated and leading to pricing pressure in several automotive markets,” BMW said.
The German carmaker also blamed the cost of complying with new global rules on emissions that went into effect in the European Union in September.
The automotive industry expects significant impacts from the White House’s trade battle with China. The latest tariffs will hit, among other things, the technological components that car manufacturers put into vehicles.
General Motors already lowered its profit target for the year as a result of higher supply costs from the tariffs, and other manufacturers like Fiat Chrysler said they are bracing for the impact in 2019.
