There was good news on the White House’s Global Trade Front on Wednesday.
The bad news is that the U.S. will now impose a 25% tariff on vehicles made by foreign automakers who want to sell their cars in the U.S. It was a direct blow, beating billions of dollars in shipping inventory in Asia and the rest of the world on Thursday.
But, “good news” – if you can call it that, and as long as there is no more change – President Trump says Reciprocal tariffs He said Wednesday that it will be announced “very leniency” next Tuesday (April 2).
See also: Vietnam scrambles to cut trade taxes as U.S. tariff looms
The latter news suggests that the U.S. is expected to achieve some of its goals and vows to strengthen U.S. imports due to tariff cuts from allies and competitors.
The purpose of automatic tariffs is not only to protect the U.S. automotive industry, but also to drive foreign automakers to build new factories in the U.S.
However, the auto industry is involved in the possibility of weaker profits, and automakers that own plants in Mexico and Canada, including foreign and the United States, could take a major blow. Bied, one of the largest automakers, Plans to build vehicles in Mexico can now be abandoned.
Japan Transport Stock Sliding
Reuters evaluated LSEG data, erasing about $16.5 billion from Tokyo's shipping stocks. They also glided in South Korea, with selling prices in Europe at a three-week low, with German Dax futures falling 0.7%.
Toyota fell 3.2%, Honda 2.83% and Nissan 2.6%. South Korea's Hyundai Motor and Kia each fell by about 4%.
Volkswagen is the top European automaker, as 43% of U.S. sales come from Mexico, S&P estimates of global travel, and even U.S. Marques are falling after-hours trade as their supply chains spread across North America.
The tariffs are well marked, so some losses are due to how much they have been priced and because car ownership is so popular in the United States that investors think consumers will eventually continue to buy.
But the signal – hurting allies and car buyers – Still, the market is upset by the market, accepting that taxes could become permanent fixtures and drive lasting changes in world trade flows.
The head of the German Automobile Industry Association said that tariffs are a “fatal signal” of global trade.
“It's hard not to interpret it as a hint, besides raising prices and lower growth,” said Prashant Newnaha, senior Asia Pacific interest rate strategist at TD Securities in Singapore.
Trump said tariffs on imported cars and light trucks will begin on April 3. Almost half of the 16 million cars sold in the United States last year were imported, with a total value of more than $330 billion.
Investment bank analysts expect sales to take a hit before they gradually recover. However, the damage will be enough to put Toyota, Honda, Nissan, Mazda Automobile, Subaru and Mitsubishi Electric below the market consensus profit estimate for fiscal 2026 – Mazda took the heaviest hit.
Mazda, shared by the US automaker
Reuters said that due to decades in Canada, Mexico and the United States, the intertwined manufacturing operations with the average purchase cost of U.S. cars may have increased thousands of dollars and hindered production.
GM fell 6% in U.S. after-hours trade, while Ford's stock fell nearly 5%. Tesla's shares fell more than 5%, but analysts say the organization faces work by CEO Elon Musk in Europe and elsewhere to cut U.S. government spending and personnel, as well as public support for far-right politicians.
BYD, which leads the overseas drive for Chinese automakers, said it has no plans to sell to Canada or the United States, but will increase global sales and build factories abroad. Its stock rose 2.3% on Thursday and has risen 53% so far this year.
The stocks of other Chinese auto and parts manufacturers may have avoided significant impact yesterday, as they have limited sales in the U.S. despite their expansion of sales in Southeast Asia, Europe and elsewhere.
In early March, Volkswagen said it was developing backup plans to address how its passenger car brands deal with U.S. tariffs imported from Mexico, while BMW was ready to absorb costs.
In addition to automakers' stocks, the market shift has also been stopped. The bond market is stable. The Mexican peso is outside the usual trading hours, though only slightly slipping, while the Canadian dollar is stable.
Investors are waiting for Trump to say he will collect more details of his trading partners next week.
“I think the biggest concern is that these tariffs will not only be destructive and economically harmful, but also show that the Trump administration's restructuring of global trade will not necessarily end with the announcement next week,” Kyle Rodda, a market analyst at Melbourne Capital.com, told Reuters.
“This could make trade uncertainty longer and raise the question of Trump’s attempt to achieve a radical change in the global trade order.”
See also:
China's Xiaomi stock sales raise $5.5 billion, strengthening its electric vehicle program
Byd Mexico's factory in Limbo for “China is worried about electric vehicle technology leaking to us”
April 2 is set to unveil Trump's reciprocal tariff date
Panama Port Trading Cloud: China Slams Hong Kong Owners Sold Out
Trump launches tariff war, China hits with 10-15% duty
Trump's steel tariffs will reach China's supply line through other countries
Chinese ships may face substantial fees to enter U.S. ports
US policy turbulent Asian chip giant with tenterhooks
Japanese automakers want government help deny U.S. tariffs
