European carmakers' shares plunge on Trump tariffs

The shares of Europe's biggest carmakers fell sharply yesterday in response to US President Donald Trump's announcement on Saturday that he would impose new tariffs on imports from China, Mexico and Canada.

French carmaker Renault SA fell 1.3% on the Paris market at 1:40 p.m. local time, while Franco-Italian-American group Stellantis NV fell 6.3%. In Frankfurt, Bayerische Motoren Werke AG (BMW) shares fell 4.2% at 1:42 p.m., Volkswagen AG fell 6.5% and Mercedes-Benz Group AG fell 4.4%.

European auto parts manufacturers also saw significant declines: Forvia SE shares lost 11.1% on the French market at 1:43 p.m., while Continental SA shares fell 4.4% on the German stock exchange.

Analysts at investment bank Stifel said, according to Reuters: "We believe that around eight billion euros of Volkswagen's revenue will be affected by the tariffs, as well as around 16 billion euros of Stellantis' revenue." In their opinion, the full impact of the tariffs announced by Trump will be around 12% of Volkswagen's operating profit in 2025 and 40% in the case of Stellantis.

Recall that on Saturday, the US president announced the imposition of 25% customs duties on important products from Canada and Mexico, respectively the increase by 10% of duties on Chinese products. The new tariffs come into effect today. Analysts believe that the entry into force of the new tariffs came much faster than markets expected.

On Sunday, Donald Trump acknowledged that the tariffs he imposed a day earlier may "hurt Americans," but "it will be worth the price." The White House leader wrote on the Truth Social network: "Will it hurt? Yes, it may. Or maybe not. But we will make America great again and it will be worth the price."

In this context, the European Union expressed its regret on Sunday over the increase in tariffs, describing the measure as "harmful to all parties." The EU warned that it would "retaliate firmly" if it were targeted by "unfair" tariffs. The European Commission stressed: "Tariffs create unnecessary economic disruption and fuel inflation. They are detrimental to all parties. Respect for international trade rules is essential for strong and sustainable economic growth."

• Canada - WTO appeal

Canada will appeal the new tariffs imposed by the United States at the World Trade Organization (WTO), according to sources quoted by AFP, who stated: "The Canadian government considers that these tariffs constitute a violation of the US commitments to the WTO and the free trade agreement that binds them."

Authorities in Ottawa have published a first list of 1,256 American products that will be affected by tariffs starting February 4, totaling 30 billion Canadian dollars (over 20 billion US dollars). These include cosmetics, tires, tools, furniture, coffee, wine, dairy products and fruit.

A second series of products follows, totaling up to 155 billion Canadian dollars (106 billion US dollars), will be announced in the coming weeks.

• Mexico wants dialogue

Mexican President Claudia Sheinbaum said late last week that she was waiting for the US president's response to her proposal for dialogue, following his decision to impose 25% tariffs on Mexican exports, adding that she would detail Mexico's response on Monday morning, AFP notes, according to Agerpres.

"I recommend that we wait for President Trump's response to our proposal," Sheinbaum said in a message to the Mexican people on social media.

Claudia Sheinbaum promised to detail in the coming days the "first measures" she intends to take in response to the US president's unilateral decision. On Saturday, she announced, without further details, "tariff and non-tariff measures in defense of Mexico's interests."

• Taiwan to help companies move operations to the US

Taiwan will help companies planning to move operations to the US, including by helping them find partners, the Ministry of Economy announced yesterday, revealing the assistance it will offer after US President Donald Trump's new tariffs, Reuters reports, according to Agerpres.

Taiwan, whose companies are major producers of technology such as semiconductors and electronic components, is vulnerable to Trump's tariffs because many Taiwanese companies have factories in both Mexico and Canada, and because Trump has threatened to impose tariffs on imported chips.

Taiwan's Ministry of Economy said it would provide information to companies looking to relocate, including information on potential U.S. states to invest in, local laws, and assistance in finding partners. The North American branches of Taiwan's Industrial Technology Research Institute will also actively promote R&D and manufacturing cooperation between Taiwanese and U.S. companies.

The source added that it would continue to closely monitor changes in international trade and maintain communication with companies to provide "immediate assistance and support to ensure they find the best strategies to cope with the changes."

Taiwan's largest investment in the U.S. is chipmaker TSMC's $65 billion plan to build factories in Arizona, a plan that began in 2020 under the previous Trump administration.

Shares of Taiwanese technology companies with factories in Mexico fell sharply yesterday, with Foxconn shares closing the session down 8.1%, Quanta shares down 9.8%, Inventec down 6.7%.

Taiwan also wants to ensure that its companies continue to distance themselves from China, which has stepped up its military and political threats to support its claims to sovereignty over the island.