...For the auto sector, absorbing U.S. import tariffs by passing price increases on to consumers has been slower and lower than we had initially forecast. For makers like Mercedes-Benz, mitigating the impacts of these tariffs will take longer and will continue to weigh on margins in 2026 and 2027. The new agreed tariff represents an additional permanent cost to automakers (15.0% of import value compared to the original 2.5% duty) to access the U.S. market. We now estimate the group's gross tariff exposure will be slightly below 2.0 billion in 2026, compared with 1.5 billion expected in 2025. Exposure to Mexico is less significant for Mercedes-Benz as only about 10,000 GLB (SUV) units are produced there and exported to the U.S., noting that the model will be discontinued by mid-2026. The import value of components from Mexico might be more relevant but any impact would depend on the definition of local content (USMCA versus U.S.). The USMCA talks are yet to begin, so this factor remains uncertain....
