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Trump Is Pushing for Massive Auto Import Tariffs. Now Car Manufacturer Stocks Are Tumbling

President Donald Trump wants to impose heavy tariffs on car imports, and European and Asian automakers’ stocks are tumbling.

In European early Thursday trading, Volkswagen (VLKAY) fell by 2%, BMW (BMWYY) by 3%, Daimler (DDAIF) by 2.9%, Peugeot (PUGOY)by 0.8%, and Renault (RNSDF) by 1.1%. In Japan and South Korea, Nissan (NSANY) fell by 1.8%, Toyota (TM) by 3%, and Hyundai (HYMTF) by 3.1%.

“There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” U.S. Commerce Secretary Wilbur Ross said Wednesday.

The tariffs of up to 25% may be levied under national security laws, much as happened with the U.S.’s threatened tariffs on steel and aluminum imports, the Wall Street Journal reported, saying Trump was behind the push.

With auto imports totaling $176 billion last year, new automobile tariffs would have a much bigger effect than the tariffs on steel ($30 billion imported) and aluminum ($18 billion).

However, while President Trump has long promised to protect the U.S. auto industry, it’s far from clear that the industry itself wants protecting.

John Bozzella, the CEO of Washington-based auto industry body Global Automakers, said the planned tariffs would be bad for U.S. consumers.

“The U.S. auto industry is thriving and growing. Thirteen, soon to be 14 companies, produced nearly 12 million cars and trucks in America last year,” he said in a statement quoted by Politico. “To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America.”

The tariffs can be seen in the context of the renegotiation of the North American Free Trade Agreement (NAFTA,) as Canada and Mexico are among the biggest exporters of cars to the U.S.