Hyundai Motor posted a decline in second-quarter operating profit on Thursday as U.S. tariffs on vehicles and parts started to weigh on its bottom line and warned of a bigger impact in the current quarter.

Earnings at South Korea’s largest carmaker fell in the second quarter, weighed by increased marketing costs and the impact of U.S. tariffs.

Hyundai's second quarter profit fell 16 percent despite strong sales primarily due to new U.S. tariffs impacting profitability and competitive standing.