Global automaker stocks plunge as Trump announces 25% tariffs

Automaker stocks tumbled Thursday after US President Donald Trump announced a 25 per cent tariff on all imported vehicles and auto parts.

The move wiped out €4.5 billion ($4.84 billion) in market value from European automakers, including Volkswagen, BMW, and Mercedes-Benz, amid concerns over rising costs and supply chain disruptions.

Companies must now decide whether to shift production to the US, absorb costs, or pass them on to consumers. Some, including Audi and Hyundai, had already planned US expansions, but executives remain wary of making long-term decisions on what could be a temporary policy.

The tariffs, set to take effect in April for vehicles and May for auto parts, threaten to add thousands of dollars to car prices, despite Trump’s pledge to curb inflation. Nearly half of US car sales last year were imports, often moving between Canada, Mexico, and the US multiple times during production.

While vehicles complying with the US-Mexico-Canada Agreement (USMCA) may qualify for exemptions, the broader impact could be severe. Analysts warn of industry-wide turmoil, with Cox Automotive predicting a 30 per cent drop in North American production, potentially cutting 20,000 vehicles per day.

Attribution: Reuters
Subediting: M. S. Salama