Global automakers suffered significant stock losses on Thursday after U.S. President Donald Trump announced steep new tariffs on imported cars and parts, intensifying trade tensions and fueling concerns about a potential economic downturn.
In Tokyo, major Japanese automakers took a hit, with Toyota— the world's top-selling carmaker—dropping by 2%, Honda sliding 2.5%, Nissan losing 1.7%, and Mazda suffering the most with a 6% drop. South Korea's Hyundai also tumbled by over 4%.
European manufacturers were not spared, as Stellantis (maker of Peugeot and Jeep) saw a 3.5% decline, Porsche fell by 4%, and BMW dipped by 1.8%. Meanwhile, India's Tata Motors, which exports Jaguar Land Rover vehicles to the U.S., lost over 5% in Mumbai trading.
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On Wall Street, U.S. auto giants General Motors and Ford saw sharp declines in after-hours trading, underscoring investor anxiety over the tariff move.
Market analyst Joshua Mahony of Scope Markets noted that earlier optimism that Trump would refrain from sector-specific tariffs had now been "entirely undermined" as the administration moved ahead with aggressive trade measures.
Trump confirmed that a 25% tariff would apply to all foreign-made cars and light trucks starting April 3 at 12:01 am Eastern Time, with key auto parts set to face similar levies within the month. He justified the move as a push to strengthen domestic manufacturing.
The decision triggered swift international backlash. Japan's government condemned the tariffs as "extremely regrettable," while Canadian Prime Minister Mark Carney called them a "direct attack" on his country's workers.
French Finance Minister Eric Lombard warned that the European Union would have no choice but to retaliate with countermeasures on American products.
Despite the auto sector's slump, London's FTSE 100 index remained steady, buoyed by a strong performance from clothing retailers. Next surged 6.9% after reporting record annual pre-tax profits exceeding £1 billion ($1.3 billion), while Marks & Spencer saw a 3.4% gain.
As trade tensions escalate, global markets remain on edge, with industry leaders and policymakers weighing their next moves in response to Washington's latest protectionist push.
