Shares of Asian automakers declined following US President Donald Trump’s announcement of new tariffs on cars not manufactured in the country.
The tariffs, set to take effect on April 2, will apply to “foreign-made cars and light trucks,” according to White House aide Will Scharf.
Japanese automakers were among the hardest hit, with Toyota and Honda falling 2.74% and 3.05%, respectively.
Nissan, which operates two plants in Mexico, declined 1.84%, while Mazda Motor dropped more than 6.4%.
Mitsubishi Motor also recorded a sharp fall of around 4%.
In South Korea, Kia Motors, which has a manufacturing facility in Mexico, saw its stock decline by over 3%.
Shares of Chinese automakers were also affected, with Nio down 3.94% and Xpeng losing 1.97%.
Indian automaker Tata Motors crashed by over 6%.
Jaguar Land Rover (JLR), Tata Motors’ luxury car subsidiary, considers the US a crucial market.
In 2024, North America made up nearly one-third of JLR’s global sales, with the US alone contributing 22%, according to its annual report.
Trump’s new tariff
President Donald Trump announced on Wednesday that he will impose a 25% tariff on all cars not manufactured in the United States.
Speaking from the Oval Office, Trump stated that vehicles built domestically will face “absolutely no tariff.”
The new tariffs, formalized in a presidential proclamation, will take effect on April 2, with collections beginning the following day.
White House aide Will Scharf clarified that the duties apply to foreign-made cars and light trucks, adding that they are in addition to existing tariffs.
According to Scharf, the measure is expected to generate “over $100 billion of new annual revenue” for the US.
However, details about the order remain unclear, particularly regarding the classification of car parts, which are often sourced from multiple countries.
Trump noted that there will be “very strong policing” to determine which components will be subject to the new tariffs.
Global reaction and impact
The tariffs have drawn criticism from global leaders, with European Commission President Ursula von der Leyen expressing concerns on social media.
Following Trump’s announcement of new 25% tariffs on foreign-made cars, US auto stocks declined in after-hours trading.
Shares of General Motors, Stellantis, and Ford Motor each fell about 5% in extended trading.
In a statement, an industry representative criticized the move, saying, “Tariffs are taxes — bad for businesses, worse for consumers equally in the US and the European Union.”
Trump had previously granted General Motors, Stellantis, and Ford a temporary exemption from similar tariffs on Mexico and Canada.
On March 5, he announced a one-month waiver for vehicles that comply with the United States-Mexico-Canada Agreement (USMCA), allowing them to avoid the new duties for now.
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