Pressure is mounting for the U.S. and EU to finalize the newly proposed auto trade deal—with Mercedes-Benz now sounding the alarm over the delay.
Zooming in: Mercedes’ chief technology officer, Markus Schäfer, warned that automakers remain strained under the current tariff regime, urging both sides to move faster on lowering levies.
European automakers like Mercedes currently face a 27.5% tariff on vehicles shipped to the U.S.
The new deal would cut the rate to 15% once the EU agrees to drop its tariffs on U.S. industrial goods.
Mercedes-Benz—which saw global sales slip 9% in Q2 to 453,700 units, including a 12% drop in the U.S.—said in July the tariff fallout alone cost its car division $420 million.
What they’re saying: “The situation has a serious impact,” said Schäfer, who also oversees purchasing, via Bloomberg. “We hope that both parties find a resolution over the coming weeks. It’s seriously needed.”
Why it matters: Dealers could soon face a sharper squeeze on margins if the U.S.-EU deal drags on, as Mercedes looks to offset costs with higher prices on its 2026 models.
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Between the lines: The European Commission is racing to fast-track legislation to scrap U.S. industrial tariffs, unveiling two proposals Thursday aimed at clearing the Trump administration’s conditions to reduce auto levies to 15%.
One act would eliminate tariffs on U.S. industrial goods while granting preferential access for a range of seafood and non-sensitive agricultural products.
The second would extend tariff-free treatment of lobster, now including processed lobster.
The measures require approval from at least 15 of the EU’s 27 member states and a simple majority in the European Parliament. Commission backing is all but guaranteed, but parliamentarians remain split—particularly over agricultural concessions—making the path to passage a bigger challenge.
Bottom line: While the European Commission is moving quickly to meet U.S. conditions, parliamentary approval remains uncertain—keeping automakers and dealers stuck in limbo until the political wrangling plays out.
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