A sweeping new spherical of tariffs from President Trump has despatched shockwaves by means of international markets, wiping billions of euros off the worth of main European carmakers and dealing a recent blow to the UK’s automotive sector.
Trump’s resolution to impose a 25 per cent tariff on all imports of vehicles and elements into the US — set to take impact on 2 April — triggered sharp selloffs in international equities, with automakers bearing the brunt.
Shares in German giants Mercedes-Benz, BMW, Porsche and Volkswagen fell between 2 per cent and 5 per cent, whereas Stellantis — father or mother firm of Vauxhall, Fiat, Citroen and Peugeot — dropped 6 per cent in Paris. In London, luxurious carmaker Aston Martin fell 4.47 per cent, dragging the FTSE 100 index down 0.6 per cent to eight,638.04. Germany’s DAX misplaced 1.42 per cent and France’s CAC 40 slipped 1 per cent.
The fallout wasn’t restricted to Europe. In after-hours US buying and selling, Common Motors fell 8 per cent and Ford 3.7 per cent. Asian markets adopted swimsuit, with Toyota, Nissan, Mazda, Hyundai and Kia all dropping, whereas Tata Motors — father or mother of Jaguar Land Rover — fell 5 per cent on India’s inventory alternate.
The brand new tariffs threaten an important lifeline for the UK automotive business. The US is the UK’s second-largest automotive export market, accounting for almost 17 per cent of complete exports, or round 79,000 autos in 2024, in accordance with the Society of Motor Producers and Merchants (SMMT). Exports to the US had surged by 38.5 per cent final yr, whilst exports to the EU and China declined sharply.
Nissan, which operates the UK’s largest automotive plant in Sunderland, exported greater than 73,000 autos to the US final yr — a full 10 per cent of its complete UK output. In the meantime, luxurious marques like Rolls-Royce, Aston Martin and McLaren are closely reliant on US gross sales.
The SMMT warned that just about eight in ten vehicles made in Britain are exported, with any disruption to worldwide commerce posing a severe risk to the business’s restoration.
Even earlier than the tariffs have been introduced, British automotive manufacturing was struggling. Output fell 11.6 per cent in February, marking the twelfth consecutive month of declines, in accordance with SMMT knowledge launched in a single day.
President Trump defended the tariffs, claiming the US was “the piggy bank that everybody steals from.” He views tariffs as a instrument to lift income to pay for tax cuts and revive home business — whilst economists warn of upper costs, provide chain disruption, and retaliatory commerce motion.
Trump has threatened even harsher tariffs if buying and selling companions reply in sort. “If the EU and Canada team up to retaliate, we’ll go further,” he warned.
In response, Canadian Prime Minister Mark Carney condemned the tariffs as a “direct attack” and pledged to defend nationwide pursuits, whereas Japan and South Korea signalled emergency responses have been being ready. European Fee President Ursula von der Leyen stated the EU would proceed to pursue “negotiated solutions while safeguarding its economic interests.”
Within the UK, Chancellor Rachel Reeves advised Instances Radio that talks have been beneath method to safe a commerce settlement with the US to keep away from the tariffs. Nonetheless, economists warned that even when the UK is spared direct inclusion, the knock-on results could possibly be damaging.
David Miles, economist on the Workplace for Finances Accountability, stated: “There is a growing realisation that we could be in for a major blow to trade that wasn’t there a few weeks ago.”
The OBR now forecasts that if international commerce tensions escalate right into a full-blown tariff battle — with common import duties rising by 20 proportion factors between the US and its companions — UK GDP might shrink by as much as 1 per cent at its peak.
With tariffs set to take impact from 3 April and additional retaliatory measures on the horizon, the chance of a full-scale commerce battle is rising. For UK and European carmakers already beneath stress, Trump’s newest transfer couldn’t have come at a worse time.
