Trump tariff whiplash forces more automakers to scrap profit guidance

By Nick Carey

LONDON (Reuters) -Unable to predict the impact of U.S. President Donald Trump's ever-changing trade war, Stellantis and Mercedes-Benz became the latest automakers on Wednesday to yank their profit guidance citing market uncertainty wrought by tariffs.

Volkswagen issued guidance at the bottom end of its forecast, but UBS analyst Patrick Hummel wrote in a client note that the German automaker's outlook did not "include any impact of U.S. tariffs," calling it "essentially a withdrawal of guidance".

Trump's trade war has pummeled markets in recent weeks and even before the latest moves, a Reuters analysis showed that about 40 companies worldwide have pulled or lowered their forward guidance in the first two weeks of the first-quarter earnings season, including General Motors and Volvo Cars.

The moves underscore the chaos unleashed by the ever-changing tariffs and the uncertainty in boardrooms and on Main Street, which is stifling Americans' appetite for spending.

The 25% tariffs on imported autos imposed earlier this month are expected to raise U.S. car prices by thousands of dollars, reducing demand and piling pressure on an automobile industry already struggling with a slowing transition to electric vehicles.

Faced with a lack of clarity, Mercedes executives exuded an aura of studied calm during the company's first-quarter conference call with analysts, referring to the chaos of Trump's opaque, shifting tariff policy as a "dynamic market environment".

Chief Financial Officer Harald Wilhelm told analysts that full-year guidance "cannot be provided today with a reliable degree of certainty".

But he warned if U.S. tariffs remained in place all year, it would shave 3 percentage points off profit margins for car sales and 1 percentage point for vans.

CEO Ola Källenius said the premium German automaker was still holding "constructive" talks with the Trump administration on its future U.S. production footprint, but stressed that Mercedes is determined to "see this through with a steady hand".

Investor reaction was muted, as markets digested the latest orders issued by Trump on Tuesday which offered some tariff relief to U.S. domestic automakers.

Under those orders, automakers will no longer also be subject to 25% tariffs on steel and aluminum or on Canadian and Mexican goods related to the U.S. fentanyl crisis. They would also receive credit for U.S.-assembled vehicles.

Volkswagen and Mercedes shares were down 0.5% and 0.9%, respectively, while Stellantis - which is far more reliant on U.S. production and stands to benefit more from the changes - was up 1.8%.