Stellantis NV expects to take a hit of around €1.2 billion ($1.4 billion) from tariffs in the second half of this year as the maker of Jeep sport utility vehicles and Fiat cars reinstates financial guidance following the European Union’s trade deal with the US.

US-listed shares dropped 4.3% in overnight trading.

The manufacturer sees a low-single digit adjusted operating income margin for the second half, it said Tuesday. Stellantis’ previous full-year forecast — which it scrapped in April due to the tariff chaos — had predicted a mid-single digit margin. The company earlier this month announced a surprise €2.3 billion first-half net loss after cutting investments and tallying the cost of trade wars.

New Chief Executive Officer Antonio Filosa is responding to changes in the auto market as well as the company’s missteps. President Donald Trump’s trade moves are raising expenses and shaking up global supply chains, while Chinese manufacturers led by BYD Co. are pushing into Europe’s stagnant car market. Stellantis’ issues are gravest in the former profit center North America, where its shipments fell 25% in the second quarter.

Stellantis’ revenue declined in six months through June over the same period last year after shipments fell in Europe, North America as well as the Middle East and Africa. Deliveries rose in South America, driven by increased demand in Argentina. The company said it’s seeing improvements in volumes, revenue and operating income compared with the second half of 2024.

Filosa also is under pressure to address excess capacity in Europe and improve some of the group’s struggling brands. They include luxury-car maker Maserati, which recorded a -38% margin in the first half after shipments slumped. The CEO is due to speak to analysts later today.

“In flat markets, the more share Stellantis loses, the more it needs to shrink its cost base, but the rhetoric from management suggests the cuts of the past went too deep,” HSBC analysts including Michael Tyndall wrote in a recent note. “For investors (and us), this presents something of a conundrum.”

Stellantis recorded a roughly €300 million hit from US tariffs in the first half as it lost production and responded to higher duties. Chief Financial Officer Doug Ostermann had flagged to investors earlier this month that the impact of the levies will likely be “significantly” bigger in the second half.