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The boss of BMW has predicted that Donald Trump’s tariffs on imports of foreign cars will be lowered this summer, as the German carmaker reported that its profits for the first quarter tumbled by 25%.
Oliver Zipse, BMW’s chief executive, said that he expects Trump’s 25% tariffs on the import of foreign cars will be dropped by July.
He made the prediction after the German carmaker reported a 25% drop in profit for the first quarter of the year to €3.1bn (£2.6bn) as it braced for the effects of Donald Trump’s trade war and strong competition in China.
Zipse also said he expected a return to lower tariffs between the US, Canada and Mexico – previously a free-trade zone under a deal he signed – because the “costs are far too big for everybody”.
“In trade conflicts, nobody wins. All sides should avoid a spiral of isolation and trade barriers,” Zipse said. He called for “zero-zero” tariffs deals amid “challenging” trading conditions for car manufacturers.
In March, the carmaker said that tariffs imposed by the US, EU and China could cost it €1bn this year. EU tariffs on Chinese electric car imports in response to alleged state aid from Beijing cost BMW more than €100m in the first quarter of 2025, it said on Wednesday.
Trump’s 90-day “pause” on tariffs above a flat rate of 10% on most countries is due to end in early July, with the threat of a return to much higher levies, alongside the 145% duties still in force on China. However, the US is rushing through a series of what it describes as trade deals with major trading partners which could lower tariffs.
BMW insisted that it is nevertheless well placed to endure extra tariff costs, with separate factories in the US and China. Zipse said BMW has experienced “hardly any effect” from the steep US tariffs on China and China’s retaliation.
Zipse said that its factory in Spartanburg, South Carolina, makes BMW the largest automotive exporter from the US by value. He added that the company’s arguments against tariffs were being listened to.
BMW also owns the Mini factory in Oxford, where the company last month cut 180 contract workers in response to lower demand.
Despite the first quarter earnings slump, BMW stuck with its guidance for profits for the year in line with 2024. It said that it expected an improvement in the global tariff situation as countries scramble to secure trade deals with the US, and insisted that it was experiencing continued strong demand for its battery electric vehicles, with sales up 32% year-on-year, despite stiff competition in China.
In the first months of the year, BMW’s sales in China, the Munich-based manufacturer’s biggest individual market, fell 17% during the period even as sales in Europe and the US rose by 6% and 4% respectively.
The stiff competition in Asia’s car market is expected to intensify after Taiwanese electronics manufacturer Foxconn announced on Wednesday that it had reached a deal to build electric cars in Taiwan for Japan’s Mitsubishi Motors.
The deal will add yet another well-funded EV competitor in Asia, and will be closely watched for signs of an approach by Foxconn, via its subsidiary Foxtron Vehicle Technologies, to Mitsubishi’s alliance partner, Nissan. Foxconn had previously approached the struggling Nissan to try to buy a stake.
