LONDON (Reuters) – Shares in European automakers fell on Tuesday as traders reacted to President-elect Donald Trump’s pledge to impose big tariffs on Canada, Mexico and China, news that fueled jitters about a possible war. global commercial.
A basket of European auto and parts stocks was the worst-performing sector in Europe, down 1.7% versus a 0.7% drop in the broader group.
Trump said in a post on Truth Social that on his first day in office he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China.
“Areas like the automotive sector, which has highly integrated supply chains along the US-Mexico and Canada-US borders, are very vulnerable,” said UBS GWM chief economist Paul Donovan.
Shares of Germany’s Volkswagen (ETR:) fell 2.1%, while Stellantis (NYSE:), the maker of Chrysler, Dodge and Fiat (BIT:), among other major brands, fell the most, with a decrease of 4.1%.
Italian broker Intermonte said Stellantis would be “the most affected” by tariffs on US imports from Mexico, as the group imported 358,000 units in 2023.
“We estimate that each additional point in tariffs could affect pre-tax profit by ~€160 million or 1.4% of expectations for 2025,” they said.
About a quarter of Stellantis’ North American sales are made in Mexico.
French automobile spare parts manufacturer. Valeo (EPA:) fell 2.5%, while German luxury brand BMW (ETR:) fell 1.5%. Volvo (OTC 🙂 Car was down more than 3% and Daimler (OTC 🙂 Truck was down 3.4%.
It’s a quick reversal for markets, which on Monday welcomed the appointment of fund manager Scott Bessent as Treasury secretary, a key Cabinet position with influence over economic policy and international affairs.
Some investors said Bessent’s nomination was a relief, given his career in finance and his understanding of markets, and some said his appointment could have reduced the possibility of harsh tariffs.