Global Car Stocks Slide as Trump Renews Tariff Threats

Global markets took a hit after President Donald Trump stressed plans to impose a 25% tariff on imports from the European Union, reigniting fears of a trade war. 

European stocks opened lower on Thursday, with the STOXX 600 slipping 0.7%, Germany’s DAX 40 down 0.6%, and France’s CAC 40 also falling 0.6%. In London, the FTSE 100 remained mostly flat.  

Luxury car stocks bore the brunt of the pressure. BMW shares dropped 2.6% on the Deutsche Börse Xetraindex, while Porsche lost 2.4%. Ferrari tumbled 4.9% on the New York Stock Exchange, and Mercedes-Benz slipped 1.6%. Volkswagen fell 1.5%, Volvo Cars dropped 3.5%, and Stellantis declined 1.1% in pre-market trading.  

The global auto industry is already under pressure from supply chain disruptions, labor shortages, and shifting regulatory landscapes in both the EU and the US. Inflation and high interest rates have dampened consumer demand, making big-ticket purchases less attractive. 

What Does This Mean for Me? 

Meanwhile, the EU’s decision to increase tariffs on Chinese electric vehicle imports has sparked fears of retaliatory measures that could hit German and American automakers.  

Trump’s tariff agenda isn’t limited to Europe. He has signaled that the planned 25% duties on Canadian and Mexican imports, originally scheduled for March 2025, could be enacted as early as April. A 10% tariff on Chinese goods is already in place.

The EU, meanwhile, is preparing countermeasures, vowing to push back against any tariffs it deems unjustified.