US, European automaker shares fall as Trump pledges tariffs
LONDON (Reuters) -Shares of U.S. and European automakers fell on Tuesday, as President-elect Donald Trump pledging big tariffs on Canada, Mexico and China fueled investor concerns over a potential global trade war.
U.S. automakers General Motors (NYSE:GM ) and Ford Motor (NYSE:F ) were down 4.2% and 2.2% in premarket trade. Toyota Motor (NYSE:TM )'s U.S.-listed shares were down 1.2%.
A basket of autos and parts stocks was the worst-performing sector in Europe, down 1.7% versus a 0.2% fall for the broader STOXX 600 .
Trump said in a post on Truth Social he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China, on his first day in office.
"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:VOWG_p ) and other European OEMs," Bernstein analyst Daniel Roeska said in a note.
"But given the wide-ranging negative implications for industrial production in the U.S., we expect this is unlikely to happen in practice."
Ford, GM, Stellantis (NYSE:STLA ) and Toyota did not immediately respond to requests for comment.
Shares in Germany's Volkswagen were down 2.3%, while Jeep maker Stellantis was down 4.8%.
Italian broker Intermonte said Stellantis would be "hardest hit" by tariffs on U.S. imports from Mexico as the group imported 358,000 units in 2023.
"We estimate that each extra 1pp on tariff could impact pre-tax profit by ~Eu160mn or 1.4% of 2025 expectations," Intermonte said.
About a quarter of Stellantis' North American sales are made in Mexico.
In a note published last week, Evercore ISI said every 10% tariff on Mexico is a 20% earnings-per-share risk for GM and 10% for Ford.
Shares of French car parts maker Valeo (EPA:VLOF ) dropped 1%, while German luxury brand BMW (ETR:BMWG ) fell 1.1%. Volvo (OTC:VLVLY ) Car was down 2.5% and Daimler (OTC:MBGAF ) Truck fell 4.2%.
It is a quick reversal for markets, which had on Monday welcomed the nomination of fund manager Scott Bessent as Treasury secretary, a key cabinet position with influence over economic policy and international affairs.
Source: Investing.com
