European automaker shares slide after Trump threatens new US tariffs

European automakers’ shares fell sharply on January 19 after US President Donald Trump threatened to impose higher tariffs on imports from Europe amid a renewed dispute involving Greenland.

Mercedes-Benz AG shares dropped as much as 6.7% in early trading in Frankfurt, while BMW AG slid about 7% and Volkswagen AG fell up to 5.4%. The declines reflected investor concerns over the potential impact of fresh US trade measures on the region’s car industry, according to Bloomberg. 

Over the weekend, President Trump said he plans to introduce additional import duties of 10% on goods from several European countries, including Germany and France, starting in February, with tariffs set to rise to 25% by June. The move reportedly caught European governments off guard.

The United States is a key market for BMW, Mercedes-Benz and Volkswagen, accounting for a significant share of their global sales and profits. All three manufacturers export vehicles to the US, including high-end models such as Mercedes-Benz’s S-Class.

European carmakers are already under pressure from existing US  tariffs, which currently stand at around 15% on most vehicles and auto parts imported from the European Union. These duties were raised last year from roughly 2.5%, prompting several automakers to issue profit warnings as costs increased and margins narrowed.

The latest tariff threat comes as President Trump renews efforts to acquire Greenland from Denmark, a proposal that has added to diplomatic tensions between the United States and Europe and contributed to uncertainty in financial markets.

By Sabina Mammadli