FRANKFURT -- The biggest threat to Volkswagen Group's 2019 profit is potential tariffs from the United States that could cost the automaker up to 2.5 billion euros ($2.8 billion), CEO Herbert Diess told the Financial Times.
"It's becoming tense once again," Diess told the paper. "You know it's a pity because we can't solve it from the car industry. It's more of a tariffs negotiation between Europe and the United States."
Analysts at London-based Evercore ISI said the introduction of tariffs could cost the automaker 2.5 billion euros ($2.8 billion) a year, about 13 percent of expected earnings.
"In the worst-case situation, that would probably be close to the real figure," Diess said of the Evercore projection.
German automakers are seen most at risk from tariffs on cars they export to the U.S. from Europe even though they have reduced the need to import vehicles by building American plants. The U.S. is the second-largest market for Mercedes and BMW cars. VW Group's VW, Audi and Porsche brands all sell vehicles in the U.S.
President Donald Trump has said he will impose tariffs on cars imported from the European Union if U.S. talks with the bloc do not yield a new trade deal.
Over the weekend, a confidential Commerce Department report sent to the president was widely expected to clear the way for him to threaten tariffs of up to 25 percent on imported autos and auto parts by designating the imports as a national security threat.