Shares in European automakers fell on Monday as investors looked ahead to an expected tariff announcement from U.S. President Donald Trump on April 2.
Analysts have suggested that the day is shaping up to see a steep escalation of Trump’s push to rebalance the U.S.’s trading stance, a central goal of his administration since he returned the White House for a second term earlier this year.
Trump, who has said the pronouncements will be part of what he has called “liberation day,” is tipped to impose fresh duties on both friends and adversaries alike, including levies matching foreign tariff barriers.
His cabinet has said a group of roughly 15 countries may be targeted, although a Wall Street Journal report said a greater number of countries was being considered. The report also said that Trump was considering a flat 20% tariff on all countries with which the U.S. has a trade deficit.
Last week, Trump revealed new automotive tariffs, making good on a pledge to penalize foreign importers of cars and light trucks into the U.S. Strategists have flagged that the move could raise domestic car prices, although Trump said over the weekend that he “couldn’t care less” if foreign automakers hike costs for consumers.
Global stocks sold off on Monday, with automakers sliding in particular. In Germany, shares in Volkswagen (ETR: VOWG_p), BMW (ETR: BMWG), and Mercedes Benz (ETR: MBGn) all fell by more than 3%, while Toyota Motor Corp (TYO:7203) (NYSE: TM) and Mitsubishi Motors (TYO:7211) also dropped in Asian trading.
Investors have been fretting that Trump’s levies could refuel inflationary pressures and spark a downturn in economic activity. Trump, for his part, has argued that the tariffs are necessary to correct perceived global trade imbalances, collect revenue to help offset planned tax reductions, and help bring manufacturing jobs back to the U.S.
