Global Auto Shares fall when Trump -Tariffs trigger trade war problems

Shares of auto giants dropped sharply on Monday after US President Donald Trump introduced long-driven tariffs on goods from Canada, Mexico and China.

Trump signed executive orders on Saturday to implement 25% tariffs in Mexican and most Canadian goods, introducing a 10% duty on Canadian energy products and Chinese goods set to take effect from Tuesday.

The US President warned Americans could feel “some pain” when the measures take effect but said The tariffs were necessary “due to the greatest threat of illegal aliens and deadly drugs that killed our citizens, including fentanyl.”

Canada and Mexico have beaten back and threatened to introduce retaliatory measures that included customs.

Shares of global car manufacturers threw themselves as investors freted the impact of a potential trade war.

Analysts expect Trump’s tariffs to have an in -depth impact on the automotive industry, citing a great deal of dependence on production operations in North America, especially in Mexico and complex global supply chains.

Japanese Auto giants Toyota and Nissan both fell more than 5% 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 almost 6%.

In Europe, shares in French car parts Supplier Valeo and French-Italian conglomerate Stellantis Decreased 6.8% and 6% respectively during the early morning agreements.

Germany’s Volkswagen slipped 5%, while domestic friends Porsche and BMW both traded with about 3.5%.

Trump has proposed The European Union could be next to customs rates and tell journalists that additional tasks on the block could be imposed “pretty soon.”

On its part, the 27-nation block has promised to respond to all US duties in a proportionate way.

The US-EU Automotive Trade has traditionally been a core pillar in the success of the European automotive industry. Tariffs on the import of EU motor vehicles would probably raise the cost of European cars in the US market, according to a analysis From Oxford Economics. The step is also likely to result in a sharp contraction of the EU auto export to the critically important US market.

For Germany, Europe’s largest economy, the prospect of US tariffs on European cars comes at a time when it is top original equipment manufacturers (OEMs) already.

Volkswagen, Mercedes-Benz Group and BMW have all issued profit warnings in recent months with reference to economic weakness and slow demand in China, the world’s largest car market.

Volkswagen said on Monday that it is currently assessing the potential effects of US tariffs on both the company and on the wider automotive industry.

“At the same time, we continue to promote open markets and stable trade conditions. This is important for a competitive economy and especially the automotive industry,” the carmaker said in a statement.

“We expect constructive conversations between trading partners to ensure the planning of security and financial stability and to avoid a trade conflict,” they added.

A spokesman for BMW meanwhile described free trade as “one of the most crucial drivers of growth and progress”, and noted that “Tariffs on the other hand hinder free trade, slow down innovation and set a negative spiral in motion. In in progress.