Global auto stocks plunge as Trump tariffs spark trade war concerns
Shares of auto giants fell sharply on Monday, after U.S. President Donald Trump imposed long-threatened tariffs on goods from Canada, Mexico and China.
Trump signed executive orders on Saturday to implement 25% tariffs on Mexican and most Canadian goods, while imposing a 10% duty on Canadian energy products and Chinese goods, which are set to take effect from Tuesday.
The U.S. president warned Americans could feel "some pain" when the measures come into force, but said the tariffs were necessary "because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl."
Canada and Mexico have hit back, threatening to impose retaliatory measures that included tariffs.
Shares of global automakers plunged as investors fretted over the impact of a potential trade war.
Japanese auto giants Toyota and Nissan both fell more than 5% on 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 nearly 6%.
In Europe, shares of French car parts supplier Valeo and French-Italian conglomerate Stellantis fell 7.8% and 7.6%, respectively.
Germany's Volkswagen slipped 6.8% during morning deals, while domestic peers Porsche and BMW both traded off by more than 4%.
Analysts expect Trump's tariffs to have a profound impact on the global automotive industry, citing a heavy reliance on manufacturing operations across North America, particularly in Mexico, and complex supply chains.
Trump has suggested the European Union may be next to face tariffs, telling reporters that additional duties on the bloc could be imposed "pretty soon."
For its part, the 27-nation bloc has pledged to respond to any U.S. duties in a proportionate way.
U.S.-EU