Global Concerns as Prices and Jobs Hang in the Balance

Trump's Auto Tariffs Spark Global Concerns

President Donald Trump's announcement of a 25% tariff on imported cars sent shockwaves through the global automotive industry on Thursday, March 27th. Carmakers worldwide warned of immediate price hikes, while dealers in major auto-exporting countries, many of which are US allies, expressed fears of job losses.

These new levies are a precursor to another round of wide-ranging US tariffs expected next week. However, the auto tariffs alone could significantly impact the average cost of a vehicle in the US, further dampening demand at a time when the sector is already grappling with the transition to electric cars.

Most auto stocks took a tumble on Thursday, with the exception of US electric-vehicle maker Tesla. "The entire automotive industry, global supply chains and companies as well as customers will have to bear the negative consequences," stated German automaker Volkswagen.

The United States is the world's largest importer of cars, primarily from Japan, South Korea, and Germany, along with vehicles from neighboring Canada and Mexico. According to research firm GlobalData, nearly half of all cars sold in the US last year were imported.

General Motors shares plummeted nearly 7% on Thursday afternoon, while Ford Motor and US-listed shares of Stellantis dropped about 3%. Tesla's stock, however, rose about 5%, as Elon Musk's company is less exposed to tariffs compared to its competitors.