American president’s tweet prompts fall in the value of European car companies’ shares, with BMW shares down 2%
Donald Trump has threatened to levy import tariffs of 20% on European cars. The US president made the warnings on Twitter, claiming that if European “Tariffs and Barriers are not soon broken down and removed” America would “be placing a 20% Tariff on all of their cars coming into the US.”
Cars made in America and imported to the European Union countries are currently subject to import tariffs of 10 per cent, yet goods traded from Europe to the US only face a 2.5 per cent levy.
While the European Commission has previously voiced a desire to “remove these duties and other barriers to trade”, Trump’s frustration at import boundaries appears to have provoked his latest warnings.
European automotive stocks fell an average of 1% following Trump’s tweet, with BMW shares down 2 per cent, Mercedes down 1.4 per cent, and Volkswagen down 1.1 per cent, according to Thomson Reuters data.
The remarks from the president follow previous threats reported in the German media that the Trump was threatening to impose a 25 per cent import tariff on European luxury cars.
Daimler, the parent company of Mercedes, issued a profit warning earlier this week following concerns over Trump’s trade disputes with China, which are set to see US import tariffs of 25 per cent placed on certain Chinese goods. This led to fears China would impose retaliatory tactics, making US-made examples of the Mercedes GLE-Class, GLS-Class and C-Class more expensive to export to China.
Trump’s latest utterance is also thought to be related to fresh trade tariffs imposed by the EU on US goods like motorcycles, jeans and whiskey, themselves a reaction to US tariffs on EU steel and aluminium.