Car stocks continue descent, gold rises on Trump’s auto tariffs
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More news: Global markets sank on Thursday, as shares in leading carmakers plummeted in response to US President Trump’s new 25% tariffs on auto imports.
The Stoxx Europe 600 Automobiles & Parts index fell 3% in early trading on Thursday, while Volkswagen, BMW, Mercedes-Benz, Porsche and Continental lost €4.5 billion ($7.7 billion) in combined market value, as investors panicked at incoming higher costs and increased operational complexity.
Gold prices climbed back toward last week’s record high, as Trump’s tariffs prompted investors to boost demand for safe-haven gold. Spot gold jumped more than 1% to US$3,052.97 an ounce, just a few dollars away from the all-time high of US$3,057.21 hit late last week. US gold futures climbed 1.3% to $3,060.90.
Asian, European and North American countries have put Trump on notice of possible retaliation against his 25% car tariffs, which threaten to ignite a fully-fledged global trade war. The US imported US$474 billion worth of automotive products last year, including passenger cars worth US$220 billion. Mexico, Japan, South Korea, Canada and Germany were the biggest suppliers.
Auto stocks drop as Trump unveils 25% car tariffs
More news: Car-related stocks lowered on the ASX after US President Donald Trump said he would impose a 25% tariff on imported finished cars and trucks, including American brands assembled overseas.
Auto parts traders Eagers Automotive (-2.7%), Bapcor (-1.8%) and ARB Corporation (-1.6%) were all trading lower at 11:25am AEDT. Vehicle marketplace operator Car Group (-1.9%) also fell.
Trump slaps 25% car tariffs on allies and rivals, promises US-made tax perks
More news: President Donald Trump said he would impose a 25% tariff on imported finished cars and trucks, including American brands assembled overseas, a move industry experts expect will raise prices and disrupt production.
What they said: “It is the beginning of Liberation Day,” Trump said, before he signed the executive order that he said would lead to “tremendous growth”.
“I think it’s going to lead cars to be made in one location, you know?”
The tariffs will be applied to “friend and foe,” and go into effect on 2 April, when Trump also plans to unveil reciprocal tariffs on a broad range of trading partners, he said. “We start collecting on 3 April,” Trump added.
Trump also said his administration would introduce tax incentives for Americans buying US-made cars on credit, where the interest paid would be deductible.
“People that think in terms of deductions are very wealthy people,” Trump said, adding they would “only going to get that deduction of interest if the car is made in the United States of America.
Trump to unveil tariffs on auto industry
The news: US President Donald Trump will announce tariffs on the auto industry today, according to the White House, escalating his fight with global trading partners ahead of a broader tariff push next week.
White House Press Secretary Karoline Leavitt said Trump will speak from the Oval Office at 4:00 pm (7:00am AEDT) to detail the move.
The numbers: The tariffs are poised to apply to finished vehicles but not auto parts, Bloomberg reported citing unnamed sources. They could affect more than USD240 billion ($381.3 billion) in annual US car and light truck imports.
Stocks fell following initial reports, with the S&P 500 falling as much as 1.2%, the Nasdaq as much as 2.06% and Tesla up to 6.2%. They had pared back some losses by mid afternoon.
The context: The move follows earlier tariffs on steel and aluminium and comes before reciprocal tariffs on April 2.
Trump has said the levies will help spur domestic auto growth and has praised Hyundai’s recent USD21 billion US expansion as proof that tariffs “very strongly work”.
Union officials warned of a “tidal wave” of new layoffs. At least 200 Canadian steel and aluminium workers have been laid off since tariffs on the metals were imposed on 12 March, Reuters reported.
The sources: Bloomberg , Reuters, White House press conference, Financial Times
