Global auto stocks fall 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, sparking concerns about the prospect of a global trade war.

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 on the news.

Analysts expect Trump’s tariffs to have a profound impact on the automotive industry, citing a heavy reliance on manufacturing operations across North America, particularly in Mexico, and complex global supply chains.

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 7%.

In Europe, shares of French car parts supplier Valeo and automaker Renault fell 8.3% and 4%, respectively, during early morning deals.

Meanwhile, Germany’s BMW, Volkswagen and Porsche were all seen trading off by around 5%.

Trump has suggested the European Union could be next to face tariffs.

For Germany, the prospect of U.S. tariffs on European autos comes at a time when it’s top original equipment manufacturers, or OEMs, are already reeling.

Volkswagen, Mercedes-Benz Group and BMW have all issued profit warnings in recent months, citing economic weakness and sluggish demand in China, the world’s largest car market.

This developing story is being updated.