A Major Blow to European and Asian Allies

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US President Donald Trump has imposed 25% tariffs on foreign automakers, dealing a major blow to European and Japanese businesses. Let’s break it down.

European auto stocks fell sharply following Trump’s announcement:

Mercedes-Benz dropped over 3%

BMW and Volkswagen declined more than 2%

Stellantis dropped over 4%

Volvo Car plunged more than 8%

Aston Martin slid nearly 5%

All in all, the new round of Trump’s tariff war has wiped out over $14 billion in market value for European carmakers, according to The Telegraph.

European Commission President Ursula von der Leyen expressed regret over the US decision to target European auto exports and vowed to defend the bloc’s consumers and businesses.

The UK is in intense negotiations with the US over tariffs on cars, steel, and other goods. London says Trump was rightly concerned about countries with large trade surpluses with the US, but the UK isn’t one of them.

In this April 27, 2018 file photo, a worker controls steel coils at the thyssenkrupp steel factory in Duisburg, Germany - Sputnik International, 1920, 11.02.2025

EU Steel Industry Faces Dire Future as US Tariffs Escalate Trade War

Japanese automakers also took a hit:

Nissan Motor closed down 1.7%

Honda Motor declined 2.5%

Automobiles accounted for 28.3% of Japan’s total exports to the US in 2024, generating approximately $63 billion annually.

According to Nomura Research Institute, Trump’s auto tariffs could shrink Japan’s GDP by around 0.2%, equivalent to about $8 billion.

Additionally, these measures significantly reduce the likelihood of the Bank of Japan raising its benchmark interest rate in May, despite consumer inflation remaining above target. -Japanese

Prime Minister Shigeru Ishiba stated: “We need to consider what’s best for Japan’s national interest. We are evaluating all options to determine the most effective response,” but stopped short of providing specific details.

Trump claims the tariffs will boost US manufacturing and expects them to generate $100 billion in annual tax revenue. The auto tariffs take effect on April 2, with tariffs on car parts following a month later. –

On his Truth Social platform, Trump warned that if the EU collaborates with Canada to harm the US economy, even higher tariffs than currently planned would be imposed on both nations.

Almost 50% of new passenger vehicles sold in the US in 2024 were manufactured abroad, according to S&P Global Mobility, while the Trump administration seeks to revive domestic production.