European automakers brace for a tariff shock as President Trump plans to raise EU car and truck duties to 25% from 15%. BMW faces a 12.1% EBIT hit in 2026, climbing to 15% in 2027, while Mercedes‑Benz could see 14% and 18% declines, and Volkswagen 9% and 11%.

Bernstein analysts warn that the higher duty will dent German profits through 2027, potentially eroding competitiveness against U.S. rivals. The tariff hike follows a September 2025 agreement that would lower EU duties to 15% if the U.S. removes tariffs on EU industrial goods. The delay in the EU’s legislative process may trigger the U.S. escalation.

Amid the trade tension, Geely Automobile sees a bright spot. Deutsche Bank notes that premium models Zeekr 9x and Zeekr 8x could deliver gross margins above 40%, potentially accounting for half of the group’s earnings. The firm maintains a target price of HK$25.00, while shares traded near HK$23.06.

The tariff increase threatens to reshape the European auto market, squeezing margins and forcing manufacturers to rethink pricing and supply chains. Geely’s margin lift offers a counterpoint, showcasing how product mix can offset broader headwinds.