The carmaker confirmed its guidance for the year, but said tariffs, political uncertainty and geopolitical tensions could pressure its return on sales, cash flows and liquidity.

Volkswagen AG’s earnings dropped by 40% in the first quarter as higher manufacturing costs cut into margins and US tariffs clouded the German carmaker’s outlook.

Volkswagen said on Wednesday that profit margins this year were likely to be towards the bottom of its guidance range and joined a chorus of automakers warning that U.S. trade policy was making it almost impossible to make financial predictions.