Employees work on the assembly line of new energy vehicles at a factory of Chinese EV startup Leapmotor on April 1, 2024 in Jinhua, Zhejiang Province of China.
Shi Kuanbing | VCG | Visual China Group | Getty Images
Shares of auto giants fell sharply on Monday, after U.S. President Donald Trump imposed long-threatened tariffs on goods from Canada, Mexico and China.
Trump signed executive orders on Saturday to implement 25% tariffs on Mexican and most Canadian goods, while imposing a 10% duty on Canadian energy products and Chinese goods, which are set to take effect from Tuesday.
The U.S. president warned Americans could feel “some pain” when the measures come into force, but said the tariffs were necessary “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl.”
Canada and Mexico have hit back, threatening to impose retaliatory measures that included tariffs.
Shares of global automakers plunged as investors fretted over the impact of a potential trade war.
Analysts expect Trump’s tariffs to have a profound impact on the automotive industry, citing a heavy reliance on manufacturing operations across North America, particularly in Mexico, and complex global supply chains.
Japanese auto giants Toyota and Nissan both fell more than 5% on Monday, while domestic rival Honda tumbled 7.2%. Shares of Japan-listed Mazda Motor Corp traded more than 7.5% lower, while Kia Motor Corp fell nearly 6%.
In Europe, shares of French car parts supplier Valeo and automaker Renault fell 6.8% and 2%, respectively, during early morning deals.
French-Italian conglomerate Stellantis, known for brands such as Chrysler, Dodge, Jeep and Maserati, fell 6% on Monday morning.
Germany’s Volkswagen slipped 5%, while domestic peers Porsche and BMW both traded off by around 3.5%.
Trump has suggested the European Union could be next to face tariffs.
For Germany, the prospect of U.S. tariffs on European autos comes at a time when it’s top original equipment manufacturers, or OEMs, are already reeling.
Volkswagen, Mercedes-Benz Group and BMW have all issued profit warnings in recent months, citing economic weakness and sluggish demand in China, the world’s largest car market.
This developing story is being updated.
