MILAN (Reuters) – Shares in some big European carmakers fell sharply on Tuesday on uncertainty over possible new tariffs after Donald Trump took office as U.S. President.
Trump did not immediately impose tariffs as previously promised but said he was thinking about imposing 25% duties on imports from Canada and Mexico on Feb. 1 over illegal immigrants and fentanyl crossing into the United States.
European carmakers such as Stellantis (NYSE:STLA) and Volkswagen (ETR:VOWG_p) have facilities in Mexico which produce cars for the U.S. market.
Stellantis shares fell around 2% by 0813 GMT, while the broader European auto sector was down around 1%, underperforming a steady market.
Germany’s Volkswagen, BMW (ETR:BMWG) and Mercedes were down between 1.2 and 1.6%.
Tariff concerns also weighed on Spanish bank BBVA (BME:BBVA), which has Mexico as its biggest market. The stock fell 1.6% in Madrid as the Mexican peso weakened by more than 1% against the dollar.
Underscoring potential risks for European exporters, Trump also floated the idea of universal tariffs but said the United States was not yet ready for such a step.
A Volkswagen spokesperson said the group was concerned about the harmful economic impact that proposed U.S. tariffs will have on consumers and the automotive industry.