The United States and China are exchanging financial fire over trade balances. The first volleys included a 10% tariff for certain American vehicles imported into China. However, the recent imposts also impacted vehicles toting a familiar Stuttgart badge: Mercedes-Benz. 

Not even a popular German automaker like Mercedes-Benz is immune to Chinese tariffs

China put an additional 10% tariff on vehicles from the United States. However, the import duties included a caveat. Specifically, the verbiage targets vehicles with engines larger than 2.5L (2,500 cc). 

The move brings the tariff amount to 25% for imported vehicles with larger engines, per Bloomberg. As expected, the imposts will apply to American manufacturers like General Motors (GM) and Ford Motor Company. However, the duties also impact Mercedes-Benz’s operations in the region.

Mercedes-Benz is already dealing with declining sales in China as domestic consumers are buying more vehicles from the Chinese manufacturer BYD and its subbrands. According to NADA, Mercedes-Benz’s grip on the largest car market in the world slipped 7% from the previous year.

Of the popular vehicles experiencing the worst sales slumps, the S-Class and Mercedes-Benz SUVs suffered a 14% drop from 2023 to 2024. And with up to tariffs impacting the imported vehicles with engines larger than 2.5L, things look bleak.    

The development follows the news of Mercedes-Benz joining Chinese electric vehicle giant Geely in a challenge to EU tariffs. The EU imposts focus on Chinese EVs en route to the People’s Republic.

Mercedes-Benz joined forces with Geely to build its subbrand Smart vehicles in China. As a result, the German car brand faces tariffs of nearly 19% to ship Smart vehicles from Ningbo to European Union member states.