BMW has reported a 36 per cent fall in profits last year following weak demand in China and a global recall of cars and has warned it expects earnings will remain at a similar level this year because of new European and US tariffs.

BMW said newly imposed trade tariffs could dent the carmaker's earnings by 1 billion euros ($1.09 billion) this year, as escalating trade tensions between China, Europe and the U.S. take a mounting toll on global companies' finances.