Audi, the luxury arm of Volkswagen AG, warned that President Donald Trump’s plan to raise tariffs on European cars could dent its 2024 earnings. The German maker said the potential duty hikes would raise import costs and squeeze margins for vehicles sold in the United States. Audi’s caution signals broader worries among European automakers about the trade draft.

The U.S. administration’s proposal targets a tariff increase from the current 2.5% to as high as 25% on imported cars, a move that would disproportionately affect premium models. Audi’s announcement underscores the sensitivity of its U.S. sales, which account for roughly one‑third of its global revenue. A higher duty could also alter supply‑chain decisions and pricing strategies across the industry.

If the tariffs materialize, Audi may face a cost increase that could reduce profit margins by a few percentage points, impacting its 2024 guidance. The automaker’s warning also serves as a reminder to investors that trade policy remains a key risk factor for European manufacturers operating in the U.S. market, where sales volumes and pricing power are already under pressure. Consequently, shareholders may reassess the company’s valuation.