On March 27, 2025, the announcement of new tariffs on foreign vehicles and parts by US President Donald Trump led to significant losses for automakers. This decision is part of Trump’s ongoing aggressive trade policies, which many believe could contribute to a recession.
In Japan, Toyota, the world’s largest carmaker, saw a 2% drop in share prices, while Honda fell by 2.5%, and Nissan dropped by 1.7%. Mazda was hit the hardest, with a 6% decrease. In South Korea, Hyundai lost over 4%.
European car manufacturers also suffered. Stellantis, maker of Peugeot and Jeep, fell by 3.5%, Porsche dropped by 4%, and BMW saw a 1.8% decline. Tata Motors, an Indian automaker that exports Jaguar Land Rovers to the U.S., saw its shares drop by over 5%.
U.S.-listed companies, such as General Motors and Ford, also experienced significant losses.
Analyst Joshua Mahony from Scope Markets noted that the optimism about Trump not imposing sector-specific tariffs had been shattered, with the president now announcing these measures before the anticipated date in early April. This sudden move has reignited uncertainty in the markets.
President Trump signed an executive order imposing a 25% tariff on cars and light trucks not made in the United States, effective from 12:01 AM Eastern Time on April 3, 2025. Key auto parts will also be affected within the month.
Approximately half of the cars sold in the U.S. are domestically produced, with a significant portion of imports coming from Mexico, Canada, Japan, South Korea, and Germany. Reactions from foreign governments have been strong. Japan’s government called the tariffs “extremely regrettable,” while Canadian Prime Minister Mark Carney described them as a “direct attack” on his country’s workforce. French Finance Minister Eric Lombard warned that the European Union may retaliate with tariffs on U.S. products.
The UK’s finance minister, Rachel Reeves, stressed that Britain seeks to avoid escalating trade tensions, particularly as the country negotiates a post-Brexit trade deal with the U.S.
On the stock market, European indexes saw declines, with the FTSE 100 in London, the CAC 40 in Paris, and the DAX in Frankfurt all down. However, gains in the retail sector, notably a strong performance by Next, which posted profits above £1 billion, offset some of the losses.
Key global stock indices at 10:30 AM GMT showed mixed results:
- London’s FTSE 100: Down 0.6% at 8,641.37 points
- Paris’s CAC 40: Down 0.4% at 8,002.76 points
- Frankfurt’s DAX: Down 0.7% at 22,672.94 points
- Tokyo’s Nikkei 225: Down 0.6% at 37,799.97 points
- Hong Kong’s Hang Seng Index: Up 0.4% at 23,578.80 points
- Shanghai’s Composite: Up 0.2% at 3,373.75 points
- New York’s Dow: Down 0.3% at 42,454.79 points
Currency movements showed slight upticks in the euro, pound, and yen against the dollar, while oil prices for both West Texas Intermediate and Brent crude saw minor declines.
The move has sparked international concerns, and its long-term impact remains uncertain.
