Mercedes Benz TANKS–Perfect Storm EXPOSED

President Trump’s tariffs deliver a powerful $1 billion blow to Mercedes-Benz, proving America First policies force foreign luxury giants to rethink their globalist playbook.

Story Snapshot

Mercedes-Benz reports 2025 EBIT slashed over 50% to 5.82 billion euros, hammered by U.S. tariffs and a 19-20% China sales plunge.
2026 guidance warns of car margins at just 3-5%, far below analyst expectations of 5.6%, despite cost savings.
Trump’s tariffs cost the company ~1 billion euros, validating protectionism’s bite against unfair Chinese competition.
Executives plan capacity cuts to 2.2 million units by 2028 and 40+ new models, but China struggles persist.

2025 Financial Hit from Tariffs and China

Mercedes-Benz disclosed full-year 2025 results on February 12, 2026, revealing group EBIT dropped more than half to 5.82 billion euros. U.S. tariffs under President Trump inflicted approximately 1 billion euros in costs, while China sales fell 19-20% to 2016 levels due to fierce local rivals like BYD and Geely. Group revenue declined 9.2% to 132.21 billion euros, with car sales down 9% to 1.801 million units. These figures mark the weakest profits since COVID, underscoring vulnerabilities in globalist supply chains.

Weak 2026 Outlook Amid Persistent Pressures

Mercedes guided for 2026 adjusted car margins of 3-5%, below 2025’s 5% and consensus estimates of 5.6%. Revenue expects to stay flat at around 132 billion euros, though group EBIT will rise significantly thanks to the “Next Level Performance” program delivering over 3.5 billion euros in savings. Without tariffs, margins could reach 6.1%, highlighting how Trump’s policies protect American workers by pressuring foreign firms. China remains a drag, with CFO Harald Wilhelm forecasting further sales losses despite new launches.

CEO Kallenius Charts Recovery Path

Ola Kallenius, Mercedes CEO, emphasized a “clear game plan” during the earnings call, pointing to strong order books extending into late 2026 and three-shift production for key models like CLA, GLC, and S-Class. The company plans over 40 new models by 2027, prioritizing top-end luxury with 15%+ midterm growth and doubling electrified sales to 2 million units. Fixed costs will drop 10% per vehicle by 2027 versus 2024 through AI efficiencies, outsourcing, and job cuts. These steps defend premium positioning against subsidized Chinese price wars.

Strategic Shifts to Counter Global Challenges

Mercedes targets production capacity of 2.2 million units by 2028, down from prior peaks, shifting output to Hungary and localizing in the U.S. and China to mitigate tariffs and trade risks. The firm ends its Nissan joint venture in Mexico by 2026, incurring 1.6 billion euros in restructuring charges last year. Net profit fell 49% to 5.3 billion euros in 2025, prompting a dividend cut to 3.50 euros per share, though a 1.7 billion euro buyback persists. Shares initially dropped 6% but recovered to -2.6%.

Mercedes Warns Of Fresh Margin Squeeze As China Struggles Persist https://t.co/0YXfHSOc74

— zerohedge (@zerohedge) February 13, 2026

Industry Experts Validate Cautious Stance

RBC analyst Tom Narayan called Mercedes’ concerns over China and tariffs “well-founded.” FactSet consensus anticipated 133.35 billion euros revenue and 5.6% margins, which the company undercut. Production ramps and cost discipline offer optimism, but persistent China erosion—fueled by state-backed locals—and U.S. protectionism signal prolonged margin squeezes for European luxury autos. Trump’s tariffs boost U.S. localization, countering EU burdens like the 2035 combustion ban and promoting fair trade over globalist overreach that hurts American manufacturing.