BMW accuses rival carmakers of overreacting to Trump tariffs
Oliver Zipse, the company's chief executive, claimed competitors such as Volkswagen, Mercedes-Benz and Vauxhall owner Stellantis were being overly pessimistic about the costs of the American levies this year.
Speaking on Thursday, Mr Zipse said: 'I think this tariff discussion is way exaggerated and also its effects on the industry.
'What's more important is the question, are the products attractive?'
His comments are a departure from the mood among executives and politicians in Europe, where governments have expressed dismay at the concessions made by Brussels in talks with Mr Trump.
A string of BMW's rivals have already warned that the costs of tariffs this year will cumulatively run to billions of euros, leading them to downgrade their profit forecasts.
Under the US-EU trade deal, Washington has agreed to lower tariffs on European cars to 15pc from 27.5pc – although this is still far above the 2.5pc rate charged before Mr Trump put the levy up in April.
Stellantis said this week it expected to pay €1.5bn (£1.3bn) this year, while Mercedes-Benz and Porsche put their costs at €362m and €400m respectively for the first six months of 2025.
BMW is also facing a potential hit of €1.5bn from tariffs this year, according to analysts.
But the company said the cost of US tariffs overall would largely be mitigated by the EU's concession to Mr Trump of lowering tariffs from 10pc to zero on American cars shipped to Europe.
Large numbers of cars made at BMW's plant in South Carolina – its biggest globally – are shipped to Europe, including its X-series SUV.
British car companies favoured
BMW also sells its luxury cars for much higher price tags than mass-market producers such as VW and Stellantis, giving the company bigger profit margins and more room to absorb the hit from tariffs.
However, the carmaker's bullish view of tariffs is not shared by some European governments, who are unhappy about the trade deal.
France has been leading the backlash, with François Bayrou, the prime minister, warning the deal represented a 'dark day' for the Continent on Monday.
Emmanuel Macron, the French president, also said the EU had not been 'feared' enough during talks with the US and pledged to be tough in follow-up negotiations, according to local media reports.
'It's not the end of it,' Mr Macron is said to have told ministers.
British carmakers have also raised concerns about the trade deal struck by the UK and US, amid warnings it risks leaving smaller manufacturers at a disadvantage.
On Wednesday, Aston Martin claimed Sir Keir Starmer's agreement with Mr Trump would favour Jaguar Land Rover (JLR) – the UK's biggest carmaker – in its current form because of a quota limiting tariff-free exports to 100,000 cars per year.
JLR accounted for three quarters of the 100,000 cars exported by British companies to the US last year.
Adrian Hallmark, the Aston Martin chief executive, warned that changes to the UK-US agreement were urgently needed 'so we don't get squashed and so that it doesn't become a JLR tariff agreement'.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
27 minutes ago
- Daily Mail
Man United prepared to take MASSIVE HIT on Rasmus Hojlund this summer as they continue pursuit of Benjamin Sesko - just two years after signing the Dane for £72m
Manchester United have opened the door to selling Rasmus Hojlund for £30million – two years after he joined the club in a deal worth up to £72m from Atalanta. United want to sign a new striker this summer and are involved in a tug-of-war with Newcastle over RB Leipzig centre-forward Benjamin Sesko. It has cast doubt over Hojlund's future at Old Trafford, with United ready to take a massive hit under profit and sustainability rules. The initial fee when the Denmark international signed in 2023 was £64m and he is two years into a five-year contract, so his book value should be around the £45m mark. Hojlund has been linked with a return to Italy and as a possible replacement for Sesko at Leipzig, but would prefer to stay at United. 'I think my plan is very clear and that is for me to stay and fight for my spot whatever happens,' he said after scoring in the 4-1 win over Bournemouth on the club's US tour in Chicago earlier this week. However, United need to sell players to help pay for new signings and manager Ruben Amorim was unable to give any guarantees over Hojlund's future, saying: 'I am really happy with Rasmus, but I don't know what is going to happen until the end of the market.' Hojlund has scored 26 goals in 95 games for United, but hit the net just four times in the Premier League last season. The club have decided to bring in a new striker this summer after spending more than £130m on Matheus Cunha and Bryan Mbeumo who will make his debut against Everton in Atlanta on Sunday night.
BBC News
an hour ago
- BBC News
How South Korea's K-beauty industry is being hit by Trump tariffs
Cars and smartphones may rank among South Korea's biggest exports to the US, but few goods inspire a more devoted following than the Asian country's beauty products.K-beauty - a term that covers a wide range of skincare, makeup and cosmetics from South Korea - is lauded for its quality and value, driving soaring demand in recent global appeal of South Korean culture has also helped propel the popularity of its Pearl Mak tells the BBC that she was introduced to K-beauty products by her friends. South Korean serums are better-suited for her skin compared to some Western brands that tend to be more harsh, the 27-year-old graphic designer "95% of my skincare is made up of K-beauty products", she Mak is not alone in her preference for South Korean skincare brands. Americans spent as much $1.7bn (£1.3bn) on K-beauty products in 2024, according to industry estimates. That marks a more than 50% rise compared to the previous year.K-beauty products are often more attractively priced than their Western counterparts - but also feature ingredients that are not as commonly found in the West - from heartleaf to snail mucin. US President Donald Trump has now imposed a 15% import tax on South Korean goods traded between Seoul and Washington. It's less than the 25% levy that Trump had threatened, but many consumers are not taking any chances. US K-beauty retailer Santé Brand saw orders spike by nearly 30% in April, right after Trump unveiled sweeping US import taxes on most of the world."When the tariff announcements hit, customers got strategic with how they were going to weather the storm," Santé Brand's founder Cheyenne Ware told the BBC. "Consumers are preparing against the uncertainty."Another K-beauty retailer, Senti Senti, has been ordering more products since Trump started his tariff threats, says manager Winnie Zhong. This week, she received alerts from suppliers urging retailers to "stock up before tariffs".Both retailers said prices of K-beauty products are likely to increase as the levies push up costs across the industry."Anyone telling you prices will stay flat through the next two years is naive," says Ms are bound to rise, especially for smaller sellers of beauty products on platforms like Amazon, who operate with slim profit margins, economist Munseob Lee from the University of California San Diego higher prices, the global popularity of South Korean culture means K-beauty products are likely to remain in demand in the US, he says."Casual buyers might be turned off by the higher price, but fans won't find an easy substitute."Ms Zhong agrees. She thinks customers will still want to buy K-beauty products but price rises may mean they purchase fewer items than prices are unlikely to stop Ms Mak buying her favourite products."It depends on how much the price shoots up, but as of now, I am willing to pay more to purchase the same products," she says. 'No easy substitute' Big K-beauty brands are in a much better position to absorb the cost of tariffs than their smaller rivals, says South Korea-based business consultant Eyal Victor larger companies will be able to avoid major price rises for their customers as they have higher profit margins, he smaller K-beauty firms that make their products in South Korea will struggle to keep a lid on costs, Mr Mamou adds."It will take some time to take effect since most goods being sold in the short-run have already been commissioned at current prices, but we'll see it play out soon." In recent days, President Trump has struck deals with Japan and the European Union that will see their exports to the US subject to the same 15% tariffs as South means countries that are home to some of the world's biggest cosmetics brands face the same levies as the K-beauty to Trump's trade policies is his ambition to see more goods being made in it's yet to be seen whether or not this will mean US buyers switch to American beauty Mak says she doesn't see US-made products as attractive alternatives."I do search for American-made alternatives often, but I have yet to find any that are as effective as the ones I use. So I wouldn't go for American products yet."
Daily Mail
2 hours ago
- Daily Mail
73 Holyrood fat cats paid over £100,000 as satisfaction with public services falls
The number of Scots civil servants earning more than £100,000 a year has soared under the SNP, the Scottish Mail on Sunday can reveal. Taxpayers are footing the bill for a growing army of civil servants - many of whom are predominanty allowed to work from home - as satisfaction with public services plummets. Overall, the Scottish Government now employs an unprecedented 73 mandarins who are officially ranked as Senior Civil Service (SCS) - mostly heads of various departments and directorates. In total, this upper tier of civil servants now costs the public purse an astonishing £8.6m a year in wages, with the vast majority earning in excess of £110,000 - three times the Scottish average annual salary. Earlier this year the SNP administration's finance secretary Shona Robison slashed millions from the budgets for the NHS, mental health and transport, claiming Scotland was facing 'enormous and growing' financial pressure. Despite this, the number of senior civil servants employed to run the country has grown sharply - as has the cost. At the same time, the civil service has come under fire for its refusal to abandon 'working from home' and for a 'sick-note' culture in which government staff take far more days off than workers in the private sector. Critics have attacked the 'out of control' cost to taxpayers and accused the SNP Government of getting its priorities all wrong. Scottish Conservative spokesman for finance and local government Craig Hoy said: 'The civil service, and the cost of it, have ballooned out of control under the SNP's watch, and by far the biggest expansion has been in those on the highest salaries. 'When Scots are paying the UK's highest taxes, but seeing worsening services, there 's no excuse for fat-cat pay packages of this sort.' Callum McGoldrick, researcher at the TaxPayers' Alliance said: 'At a time when public services are clearly under pressure, it's hard to justify the steady growth in high-paid civil servants at the top of the Scottish government. 'With budgets being squeezed across the board, Scottish taxpayers will be asking whether ministers have got their priorities right. 'The focus should be on improving services for the public, not inflating the salaries bill in Holyrood.' The Scottish Government recently published its annual list of Senior Civil Service staff, reflecting the situation at the end of March. Overall there are now 73 SCS on a wage bill of totalling £8.6m. The number is higher than the 66 staff on six-figure sums last year, which had added up to a total wage bill of £7.5m. In comparison, there were 52 SCS on £100,000 in 2023, 38 in 2021 and just 14 as recently as 2018. The current list includes director generals of government departments - plus heads of directorates including Cladding Remediation, Covid Inquiry Response, Organisational Continuity and Heat In Buildings. The highest paid is Caroline Lamb, director general of the health department and head of the Scottish NHS, whose salary is listed between £205,000 and £209,000 a year. Four other staff are listed as earning over £150,000, including former Permanent Secretary JP Marks who took home £190,000 as the country's most senior civil servant before leaving in April to take up a new job as chief executive of tax agency HMRC. He was replaced by Joe Griffin, who in his former role as the Scottish Government's director general of strategy & external affairs earned £140,000 a year. The official responsible for the country's finances is director general of the Scottish Exchequer Alyson Stafford who takes home £160,000. The list shows a further nine civil servants earning between £120,000 and £150,000 a year. Most are director generals of departments including Communities, Corporate, Economy, Education & Justice, and Net Zero. Overall 45 officials earn between £110,000 and £120,000 a year - including the government's directors of Corporate Transformation, Digital, and Propriety & Ethics. Meanwhile the public are increasingly unhappy with the public services the government provides. A survey published earlier this year by research firm Ipsos shows almost three in four Scots (74 per cent) think public services in their local area have got worse in the last five years. Of those, 62 per cent believe the Scottish Government is mainly responsible for the deterioration. Half of Scots (51 per cent) say they are dissatisfied with the quality of health services, while 28 per cent are dissatisfied with the quality of primary and secondary education, and half (51 per cent) are dissatisfied with the quality of policing. The civil service has also been criticised for clinging to the working from home policies initially imposed in the wake of Covid. Since the pandemic in 2020, working from home or hybrid working has been the default option for many staff. New rules introduced to try and boost productivity mean that, from October, staff will have to turn up at the office at least two days a week. The figure is lower than the equivalent policy for civil servants working for the UK government in Whitehall, which states that civil servants must spend at least 60 per cent of their time working in the office. However the edict has sparked complaints from some Scottish civil servants about the cost of having commute more regularly to government offices in Edinburgh and Glasgow. Some have raised concerns about the environmental impact of driving themselves to work - while others have warned the order to return to the office is 'an attack on their human rights'. Separately it emerged in June that Scotland's civil servants last year took an average of 8.7 days off sick - the worst recorded rate of absence in the government's history, and more than double the rate across the private sector. Although levels of pay for SCS staff are reserved to Westminster, the size and hierarchy of the civil service in Scotland is a matter for the Scottish Government. Responding to the criticism levelled at it, the government argued that its senior civil servants brought valuable expertise - while also vowing to deliver 'optimum value' for taxpayers. A spokesperson said: 'Senior civil servants manage performance and delivery, and ensure the Scottish Government achieves its goals. They bring significant expertise and progress the government's plans for delivering on its Programme for Government. ' It also said its public service reform strategy will 'ensure every pound spent delivers optimum value' and will 'reduce the annual combined corporate costs of the government and Scotland's public bodies by £1 billion over five years'.
