The German luxury automaker Porsche predicts it will suffer a 300 million euro ($351 million) financial impact from U.S. tariffs which took effect in April and May because the company maintains market share by bearing rising import expenses.
The company revealed this financial impact through slides which were made available before its quarterly earnings announcement. The company had mentioned earlier that the tariffs would result in a “low triple-digit million euro” impact but did not specify the exact amount.
The financial impact arises from President Donald Trump’s escalating trade policies which now include tariffs on automobiles and copper and semiconductors. The premium pricing of Porsche along with its heavy dependence on U.S. sales makes the company highly susceptible to changes in trade policies.
The company chose to absorb the increased costs during April-May rather than raise prices because it wanted to protect its consumers from sudden price increases.
The disclosure from Porsche demonstrates how worldwide automakers prepare for market uncertainty because of fresh U.S. trade tensions. The European automotive industry including Porsche faces increased pressure to transform their supply chains and pricing models because Trump continues to threaten additional import levies.
