Trump Tariff Threat Causes Global Auto Stocks To Drop

On Monday, after US President Donald Trump announced long-anticipated tariffs on goods from Canada, Mexico, and China, shares of various automakers saw a sharp decline.

Trump signed executive orders over the weekend to impose 25% tariffs on most Canadian and Mexican goods, along with a 10% duty on Canadian energy products and Chinese imports, which are set to take effect on Tuesday.

The U.S. president cautioned that Americans might experience “some pain” once these measures are implemented but insisted that the tariffs were essential “due to the critical threat of illegal immigration and deadly drugs, including fentanyl, that are harming our citizens.”

In response, both Canada and Mexico have threatened retaliatory measures, including their own tariffs. The impact of this trade war has also taken a toll on the global automaker sector.

If we talk about the plunge, Japanese automotive giants Toyota and Nissan both fell over 5% on Monday, while domestic competitor Honda tumbled by 7.2%. Shares of Mazda Motor Corp. in Japan plummeted more than 7.5%, and Kia Motor Corp. dropped nearly 6%.

Additionally, shares of the French parts supplier Valeo and the Franco-Italian conglomerate Stellantis fell by 7.8% and 7.6%, respectively.

Trump has also hinted that the European Union (EU) might be the next target for tariffs.