Volkswagen reported a 1.3-billion-euro ($1.5-billion) first-half hit from tariffs and cut its full-year sales and profit margin forecasts in the German carmaker's first assessment of the damage from U.

The German automaker said U.S. import duties erased about $1.5 billion from its profit in the first half of the year, and it lowered its forecasts for the full year.

The German automaker said it expects challenges due to political uncertainty, expanding trade restrictions and geopolitical tensions.