Autos Lead Market Losses After Trump Tariffs

London: Automakers were battered Thursday and stock markets fell on both sides of the Atlantic 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.

On Wall Street, the Dow, the tech-heavy Nasdaq and the broader-based S&P 500 were all around half of one percent in the red more than two hours into trading, with General Motors giving up almost seven percent while Ford's dip was just shy of three 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 1.3 percent, Porsche lost 2.6 percent, Mercedes lost 2.7 percent and BMW fell 2.5 percent, helping to push the Frankfurt DAX index down 0.7 percent.

Jeep maker Stellantis lost more than four percent.

In Mumbai, India's Tata Motors, which exports Jaguars and Land Rovers to the United States, lost more than five percent, leading analysts to speculate on where markets may be headed.

"The trade war has escalated, and unsurprisingly, German carmakers are leading the declines or are among the biggest decliners today," said StoneX Group analyst Fawad Razaqzada.

"While investors see a fair chance for successful negotiations between the European Union and the US in the coming weeks, many prefer to wait for these discussions rather than speculate in advance," suggested Jochen Stanzl, chief market analysts with CMC Markets.

"Ultimately, these actions could follow familiar patterns: threats issued first, followed by negotiations, leading to compromises that the US president can proudly present," said Stanzl.

"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 previous indications that levies lined up for the president's so-called "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 imported into America. 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.

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.

French Finance Minister Eric Lombard warned: "The only solution for the European Union will be to raise tariffs on American products in response."

MENAFN27032025000063011010ID1109365529