German auto giant Volkswagen said on Friday that tariffs imposed by US President Donald Trump had cost it 1.3 billion euros in the first half of the year as it reported falling profit.

Overall net profit fell 38.5 percent year-on-year during the period to 7.28 billion euros (US$8.54 billion).

Higher sales of lower-margin electric vehicles as well as restructuring costs hit the result in addition to the tariffs, Volkswagen said.

Finance Chief Arno Antlitz said Volkswagen was nevertheless "on the right track" and that performance was at the "upper end of expectations", if tariffs and restructuring costs are excluded.

The 10-brand group also cut its revenue and profit outlook, warning of "political uncertainty and increased barriers to trade" for the remainder of the year.

It now forecasts a profit margin for the year of between four and five percent, down from 5.5 to 6.5 percent previously, amounting to billions of euros for the firm.

The range assumes that the United States will continue to levy tariffs of 10 percent on imported cars in the best case and stick to its current rate of 27.5 percent in the worst, Volkswagen said.

Its previous guidance, released in April shortly after new US tariffs took effect, did not take the increased duties into account.

Sales by volume in North America fell 16 percent "mainly due to tariffs" in the first half even as they rose slightly worldwide, Volkswagen said.

Mr Trump in April slapped an additional 25-percent levy on imported cars as part of an aggressive trade policy he says will help boost US manufacturing.

That has hit European carmakers. French group Stellantis – whose brands include Jeep, Citroen and Fiat – said on Monday that North American vehicle sales by volume plunged 25 percent in the second quarter of the year. (AFP)