Following US President Donald Trump’s announcement of new vehicle import duties, shares of some of the largest automakers in the world plummeted Thursday, causing European stock markets to decline and Wall Street to open lower.
Late on Wednesday, Trump declared 25% tariffs on all cars and foreign-made auto parts imported into the US. This announcement caused significant losses in South Korean and Japanese markets during overnight Asian trade.
Following the bell, US automakers lost market share. Concerns about the effect on their supply lines throughout the European markets caused General Motors to plummet 6% and Ford’s stock to drop nearly 5%.
European markets plummeted, with shares of Mercedes-Benz, BMW, and Volkswagen—the continent’s largest automaker—all suffering. At 1209 GMT, the STOXX 600 was down 0.8% for the day and at its lowest level since March 14. As investors awaited the effects on Germany’s automotive industry, the FTSE 100 fell 0.8% and the DAX fell 1%.
Yields on Eurozone bonds fell, with Germany’s 2-year yield falling to its lowest level since March 5. Wall Street futures were lower, with S&P 500 e-minis down 0.1% and Nasdaq futures down 0.3%. Investors worry that the tariffs, the most recent development in a global trade battle, will hinder the economy and perhaps increase US inflation.
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