Volkswagen lowers guidance as tariffs hit profit in second quarter

BERLIN (Reuters) -Volkswagen on Friday gave its first assessment of how U.S. President Donald Trump's trade war with Europe is expected to impact its 2025 earnings after tariffs dealt a blow to the German auto giant's operating profit in the second quarter.

Europe's biggest carmaker now expects an operating return on sales in the range of 4-5%, compared with a previously forecast 5.5-6.5% range, the company said, giving its long awaited assessment of the impact of tariffs on its business.

Full-year sales are now expected to be level with the previous year. The company had previously forecast a rise of up to 5%.

Caught in the crosshairs of Trump's trade salvo on Europe, Volkswagen and its peers are pressing European trade negotiators to strike a deal to replace a 25% tariff on their cars in place since April.

On Friday, Volkswagen reported an operating profit of 3.8 billion euros ($4.46 billion) in the quarter ended June 30, down 29% on the previous year.

($1 = 0.8518 euros)

(Reporting by Rachel More, Editing by Friederike Heine)

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