London, United Kingdom — Shares in automakers led stock market losses Thursday after US President Donald Trump announced painful tariffs on imported vehicles and parts as he presses hardball trade policies many fear will spark a recession.
Wall Street’s main indexes opened in the red, with General Motors sinking more than nine percent in early trading while Ford limited losses to under one percent
In Tokyo, Toyota — the world’s top-selling carmaker — fell two percent, Honda shed 2.5 percent, Nissan was off 1.7 percent and Mazda dived six percent.
Seoul-listed Hyundai gave up more than four percent.
Among European auto firms, Volkswagen shed 2.4 percent, Porsche was down around 3.5 percent, Mercedes lost four percent and BMW fell 2.7 percent, pushing the wider Frankfurt stock markets down more than one percent.
Peugeot and Jeep maker Stellantis shed more than five percent.
In Mumbai, India’s Tata Motors, which exports Jaguar Land Rovers to the United States, lost more than five percent.
“Recent glee over the notion that Trump wouldn’t impose sector specific tariffs… (in early April) have been entirely undermined by the fact that the president has instead opted to start announcing such measures ahead of that date,” noted Joshua Mahony, analyst at Scope Markets.
There had been indications also that levies lined up for the president’s “Liberation Day” on April 2 would be less severe than feared.
However, the White House’s habit of alternating between tough talk and leniency has fanned uncertainty and the latest announcement did little to soothe nerves.
“What we’re going to be doing is a 25 percent tariff on all cars that are not made in the United States,” Trump said as he signed an order in the Oval Office.
The move takes effect at 12:01 am Eastern time (0401 GMT) on April 3 and affects foreign-made cars and light trucks. Key automobile parts will also be hit within the month.
“The move has intensified concerns about the impact on global growth and corporate profitability, particularly for carmakers in Mexico, Japan, South Korea, and Germany -— key suppliers to the US market,” said Daniela Sabin Hathorn, senior market analyst at Capital.com.
About half of the cars sold in the United States are made within the country. Of the imported vehicles, about half come from Mexico and Canada, with Japan, South Korea and Germany also major suppliers.
Japan’s government called the tariffs “extremely regrettable”, while Canadian Prime Minister Mark Carney called it a “direct attack” on his country’s workers.
And French Finance Minister Eric Lombard warned on Thursday: “The only solution for the European Union will be to raise tariffs on American products in response.”
UK finance minister Rachel Reeves said Britain does not want to “escalate” trade wars, with London locked in talks with Washington over potentially securing a post-Brexit trade deal.
“We are looking to secure a better trading relationship with the United States,” she told Sky News.
