Reigniting trade war fears, President Donald Trump is said to seek a ban on selling German luxury cars in the U.S., including those from the nation’s big three automakers: Volkswagen, Mercedes-Benz maker Daimler, and BMW.
Shuddering in light of the news, shares of the automakers fell in Germany Thursday. Shares of Volkswagen and Daimler each fell 2%, while BMW slid 1%. The Germany DAX Index also shed about 1%
But that report is only a sliver of the pain those carmakers have felt due to the Trump administration’s actions.
A week earlier, the Commerce Department said it was considering tariffs on vehicle imports, with Trump reportedly considering tariffs of up to 25%.
These reports appear to have made the Trump administration’s protectionist stance all the more real to investors in recent weeks. In total, since that report emerged, Mercedes-Benz maker Daimler, Volkswagen, and BMW have together shed $20.2 billion in market value, with Volkswagen now valued at about $93.4 billion, Daimler at $77 billion, and BMW at $64.2 billion.
German carmakers have long been threatened by the Trump administration. While still President-elect, Trump threatened those automakers with a 35% border tax. More recently in April, Trump called for various U.S. agencies to look into new rules and restrictions, that could make foreign-made cars more expensive, and therefore less attractive, to American consumers.
At the same time, German automakers are also facing shifting tides within their own borders. On Thursday, Hamburg became the first city to ban older models of cars and trucks running on diesel.