By Max Bernhard 
 

Shares in German car makers came under pressure Thursday after Daimler AG (DAI.XE) warned that China's import duties on U.S.-built vehicles would hurt earnings for its Alabama-made Mercedes-Benz SUVs.

Daimler shares traded 4.1% lower, while peers BMW AG (BMW.XE) and Volkswagen AG (VOW.XE) lost 2.8% and 2.6% respectively at 1024 GMT, as investors worried about the widening impact from the escalating trade dispute between China and the U.S.

Both Volkswagen and BMW confirmed their guidance for 2018 on Thursday and BMW said it was continuously evaluating its strategic options and observing any international developments closely in light of the tariffs.

China is the most important market for the big three German car makers, which all operate sites in the U.S. from where they export some vehicles to China, as well as other countries.

Daimler said the Chinese tariffs where the "decisive factor" for its earnings revision, but said earnings would also be hit by other factors including new emissions testing regulation and recalls.

Daimler's profit warning appears premature given that the tariffs haven't been confirmed yet, said brokerage Evercore ISI. It suspects the German car maker is facing increasing cost pressures, irrespective of ongoing trade disputes.

"Whether it is commodities, FX, tariffs, emissions compliance, ageing product portfolio, R&D associated with forthcoming product portfolio, slowing European sales growth, there are clearly many headwinds across the board which need to be managed," the brokerage said.

Write to Max Bernhard at max.bernhard@dowjones.com; @mxbernhard

(END) Dow Jones Newswires

June 21, 2018 06:50 ET (10:50 GMT)