Shares of leading European automakers fell by 5-7% on Monday, January 19, following statements by U.S. President Donald Trump regarding new tariffs.
He plans to raise import tariffs from Europe to 10% in February, with a subsequent increase to 25% in June. Mercedes-Benz lost 6.7% of its value on the Frankfurt Stock Exchange, BMW – 7%, Volkswagen – 5.4%. Even Porsche, which has no production in the U.S., fell by 4.9%.
Trump announced new tariffs last week affecting several European countries, including Germany and France.
European manufacturers are already feeling the pressure from Trump's preliminary tariff decisions. Currently, tariffs stand at 15% for most cars and parts from the European Union. A year ago, the president sharply increased them from about 2.5%, which triggered a wave of profit warnings across the sector.
Michael Dean, an analyst at Bloomberg Intelligence, calculated the impact of the new taxes. According to his estimates, the core profits of German, British, and Swedish automakers will decline by about 3 billion euros, or $3.5 billion annually.
Tariffs are not the only issue facing the industry. European car companies are experiencing a drop in sales in China and a slower-than-expected transition of consumers to electric vehicles.
