- U.S. autos imports tariff to take effect on April 2
- Car parts tariff to be imposed beginning May 3
- Foreign automakers warn costs in US will rise, jobs at stake
- Shares in U.S., European automakers slide
BERLIN/DETROIT, March 27 (Reuters) – Automaker stocks around the world slumped on Thursday after U.S. President Donald Trump said that he would impose 25% tariffs on all vehicles and foreign-made auto parts imported into the United States.
Volkswagen, BMW, Mercedes-Benz, Porsche and Continental lost 4.5 billion euros ($4.84 billion) in combined market value on Thursday, as investors panicked at the prospect of more costs and complexity in an industry already struggling with a slow ramp-up of electrification and high logistics costs.
Carmakers must now decide whether to localise more production in the U.S. to avoid the tariffs, swallow the cost, or pass it onto consumers.
Companies including Volvo Cars (VOLCARb.ST), opens new tab, Volkswagen’s Audi , Mercedes-Benz and Hyundai have already said they will move some production to the region this year.
But some CEOs have, in private, expressed reluctance to make long-term business decisions based on what could be a short-term policy.
“These policies have already made equity and debt markets extremely nervous, and we know that the president regards the Dow Jones index as a key barometer of his success,” analysts at Bernstein Research said in a note.
“It is hard to judge the duration of such chainsaw-like policies if these cause a market slump that does not appear to be transitory,” they added.
Shares in Stellantis and Porsche sank 4% on Thursday, while Mercedes-Benz was down 2.8%. . General Motors slumped 6.5% in premarket trading, while Fordwas down 4.3%.