European, Asian car industry stocks drop following Trump's 25% tariff announcement

Shares of some of the world's biggest automakers plunged on Thursday, March 27, following President Donald Trump's announcement of a 25% tariff on all foreign-made cars.

White House aide Will Scharf confirmed that the tariffs would apply to imported cars and light trucks and take effect on April 2, Caliber.Az reports citing US media.

Despite prior warnings about the move, stock prices for automakers from Frankfurt to Seoul dropped significantly.

Volkswagen, Europe's largest car manufacturer, saw its shares decline by 3.4%, while BMW and Mercedes-Benz suffered 4% losses. In Japan, the auto sector lost an estimated $16.5 billion overnight, with Toyota shares falling 2.7% and Honda dropping 3%, alongside declines for Nissan, Hyundai, and Kia. S&P Global highlighted Volkswagen as particularly vulnerable, as 43% of its US sales come from Mexico, a key production hub for both Volkswagen and Chrysler owner Stellantis.

Germany's car industry association criticized the tariffs as a “fatal signal” for global trade, while Trump later warned via his Truth social media platform of even higher tariffs on the EU and Canada if they acted against US economic interests.

European Commission President Ursula von der Leyen expressed regret over the decision, emphasizing the EU's commitment to finding diplomatic solutions while protecting its economic interests.

By Nazrin Sadigova