Auto stocks tumbled around the world on Monday as new tariffs from U.S. President Donald Trump threaten to cut sales from factories in Mexico and Canada. Stocks such as Toyota Motor Corp and Nissan Motor Co fell in Asian trading, with Volkswagen AG and Stellantis NV leading losses among European auto stocks. General Motors Co and Ford Motor Co fell in U.S. premarket trading.
Trump is scheduled to impose 25% tariffs on goods from Mexico and Canada starting on Tuesday, calling into question decades-old supply chains, especially for global automakers that have established manufacturing centers in Mexico to mainly supply the U.S. market.
It adds to an already difficult period for automakers, who are grappling with weak demand in key markets, especially for electric vehicles, and increased competition from manufacturers. An index of shares of European carmakers and parts suppliers has fallen about 12% over the past year.
Volkswagen, which exported more than 500,000 vehicles from Mexico to the United States last year, saw its shares fall 6.7%, while Stellantis shares fell 7%. Toyota shares closed down 5%, and Nissan Motor once fell 10% before recovering some of its losses.
In addition to Ford and General Motors, electric carmakers Tesla, Rivian and Lucid also fell in U.S. pre-market trading.
Luxury carmakers BMW and Mercedes-Benz also fell 6.5% and 5.3% respectively. BMW employs about 3,700 workers at its plant in San Luis Potosí and exported 95,151 vehicles from Mexico to the United States last year.