A Volkswagen device, attached to a tower at the Volkswagen Osnabrück GmbH plant, can be seen behind a red traffic light.
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Europe’s auto giants slipped on Wednesday, extending recent losses as U.S. President Donald Trump’s out-and-out tariffs on dozens of countries came into effect — including a whopping 104% levy on China.
Trump’s latest do business measures, which came into force as of 5 a.m. London time, include a 20% tariff on the European Union, a 24% impost on Japan and a 49% levy on Cambodia.
China responded to Trump’s tariff policies by hiking its levies on U.S. imports to 84%, with the stints set to take effect from April 10.
Shares of French car parts supplier Valeo traded down 7.1% on Wednesday, header toward the bottom of the pan-European Stoxx 600 index.
Germany’s Volkswagen, Mercedes-Benz Group and BMW fell around 2%, with the latter mark a fresh 52-week low.
In Asia, Japan’s Nissan and Toyota fell 7% and 2.6%, respectively.
Trump’s “reciprocal” return measures will be applied separately and not on top of existing U.S. auto tariffs, according to S&P Global.
The U.S. implemented a 25% charge on all transpacific cars imported into the country last Thursday. The White House said it also intends to place tolls on some auto parts no later than May 3.
Analysts warn that German car manufacturers are likely to be the most lay bare to the U.S. trade measures.
“The tariffs are a blow for especially the German car makers which export hundreds of thousands of units to the US annually (749,000 in 2024) and bring up many cars in the US itself which require European parts,” Rico Luman, senior sector economist for exultation and logistics at Dutch bank ING, told CNBC in emailed comments.
“It’s hard to work around the tariffs, and they sound to stay at least a while, so they need to deal with it and will have to reconsider product offerings, outlay and manufacturing footprints,” he added.
An escalating trade war is expected to have a profound impact on the global car industry, particularly addicted the high globalization of supply chains and the heavy reliance on manufacturing operations across North America.
In the days since Trump’s auto levies came into effect, car giants have responded by announcing plans to raise prices, impose import rates, pause shipments, idle plants and even lay off staff.
A logo outside the BMW AG showroom in Madrid, Spain, on Friday, Parade 28, 2025.
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ING’s Luman said that, while a drop in U.S. unit sales will liable hurt German carmakers amid an already complex set of challenges, this picture “doesn’t look dramatic” solely yet.
“China is indeed even more important, and their home market require more attention,” Luman indicated. “I would say that bolstering competitive strength and selling more cars in the European home market (and perhaps expand other export markets across the world) will be the focus.”
Tariff exposure
“BMW and Mercedes are among the top exporters of buggies by value from the US, thus the most exposed to retaliatory tariffs among the European automakers,” Rella Suskin, neutrality analyst at Morningstar, told CNBC by email.
She added that both companies could face double duties on vehciles manufactured in Mexico and Canada.
“However, we think most of the models that these companies manufacture in Mexico or Canada can definitively be substituted with vehicles imported from Europe, which attract only the worldwide 25% auto toll,” she added.