BMW expects to take €1 billion hit from growing tariff war

BMW AG expects escalating trade conflicts between the US, Europe and China to cost the carmaker about €1 billion ($1.1 billion) this year, Chief Executive Officer Oliver Zipse said. 

“We don’t think that all these tariffs will last very long, though some of them might last longer,” Zipse said Friday in a Bloomberg Television interview. With a cost estimate of €1 billion, “we are quite safe,” he added.

BMW and other European carmakers are bracing to see the full extent of President Donald Trump’s planned tariffs on vehicles imported to the US. The levies threaten to hit not just cars made in Europe but also those produced at plants in Mexico and Canada, which automakers have operated for years under previous trade agreements.

BMW is already facing duties on vehicles it produces at its plant in San Luis Potosi, Mexico, for export to the US. Trump has postponed the tariffs for companies in compliance with the USMCA trade deal, but BMW falls short of local content rules.

At the same time, BMW is being hit by European Union tariffs on vehicles imported from China, where its Mini brand produces an electric car and an SUV. BMW has joined Chinese manufacturers in challenging the levies in court.

“If you overdo it with tariffs, it sends a negative spiral to all market participants,” Zipse said. There are “no winners in that game.”

This story was originally featured on Fortune.com