LONDON (Reuters) – Shares of U.S. and European automakers dropped on Tuesday after President-elect Donald Trump pledged massive tariffs on Canada, Mexico and China, fueling considerations of a harmful commerce conflict.
Trump mentioned in a put up on Reality Social he would impose a 25% tariff on all merchandise from Mexico and Canada, and a further 10% tariff on items from China, on his first day in workplace in January.
“If implemented, this would spell disaster for the U.S. auto industry and Detroit Three manufacturers, all of whom import significant numbers of vehicles from Canada and Mexico, as well as Volkswagen (ETR:) and other European OEMs,” Bernstein analyst Daniel Roeska mentioned in a be aware.
“But given the wide-ranging negative implications for industrial production in the U.S., we expect this is unlikely to happen in practice.”
Shares of U.S. automakers Common Motors (NYSE:) and Ford Motor (NYSE:) had been down 7.8% and a couple of.6%, respectively. Toyota Motor (NYSE:)’s U.S.-listed shares had been down 1.5%.
Amongst European automakers, Jeep maker Stellantis (NYSE:) and Volkswagen had been down about 4% and a couple of%. A basket of autos and components shares was the worst-performing sector in Europe, down 1.84% versus a 0.65% fall for the broader .
Stellantis declined to touch upon Trump’s put up, whereas rivals Ford, GM and Toyota didn’t instantly reply to requests for remark.
Final week, GM CFO Paul Jacobson mentioned the automaker had some belongings in Mexico.
“We’re going to continue to work with the administration because I think our goal is very consistent with what the administration’s goal is in terms of U.S. jobs and what that can mean,” he advised a Barclays (LON:) convention when requested about potential tariffs.
Ford CFO John Lawler mentioned final week the automaker must see what degree of tariffs had been imposed and determine on pricing.
In a be aware revealed final week, Evercore ISI mentioned each 10% tariff on Mexico is a 20% earnings-per-share danger for GM, and 10% for Ford.
“We estimate that each extra 1pp on tariff could impact pre-tax profit by ~Eu160mn or 1.4% of 2025 expectations,” Italian dealer Intermonte mentioned on Stellantis.
A few quarter of autos bought by Stellantis in North America are made in Mexico.
German luxurious model BMW (ETR:)’s shares fell 1%. Volvo (OTC:) Automobile was down 2.5% and Daimler (OTC:) Truck dropped 4.6%.
Shares of auto suppliers took successful too. Canadian firm Magna Worldwide (NYSE:)’s U.S.-listed shares fell 3%, whereas Aptiv (NYSE:) and Borgwarner (NYSE:) fell 2.7% and a couple of.1%, respectively.
(This story has been corrected to say that a few quarter of Stellantis’ autos bought in North America are made in Mexico, not Mexico makes up a few quarter of Stellantis’ North America gross sales, in paragraph 13)
