European automotive stocks are under pressure following Donald Trump’s announcement of a 25% tariff on imported vehicles and components. Stellantis shares fell 3.25%, while Renault and major suppliers also declined. The DAX40 index in Germany suffered due to losses from Porsche, Mercedes-Benz, and BMW. Analysts warn of significant challenges, particularly for Volvo, BMW, and Mercedes, while some industry groups express concerns over the potential negative impact on the U.S. market and consumer choice.
(AOF) – The European automotive market is experiencing significant pressure on Thursday, following the announcement by Donald Trump regarding a hefty 25% tariff on all imported vehicles and automotive components destined for the United States. Stellantis, which is notably tied to the U.S. market as the parent company of Chrysler, has seen a sharp decline of 3.25%, now priced at 11.05 euros, marking the most considerable drop within the CAC 40 index. Renault, though less exposed, is also feeling the impact. Suppliers such as Forvia (-2%), Valeo (-4.7%), and Opmobility are similarly retreating within the SBF120 index.
Impact on European Indices
Meanwhile, in Germany, the DAX40 index is adversely affected by declines from major players like Porsche, Mercedes-Benz, and BMW, with Volkswagen also reporting losses. This downturn illustrates the ripple effects of tariff announcements on key automotive manufacturers across Europe.
Concerns and Reactions from the Industry
Trump’s objective is to ‘shield the American automotive sector,’ which he deems crucial for national security, from what he describes as excessive foreign imports that jeopardize domestic manufacturing and supply chains. Analysts at Stifel have pointed out that this scenario, while anticipated, poses serious challenges. Porsche and Ferrari face significant exposure to these tariffs in terms of volume, but the most substantial profit impacts are expected for Volvo Cars, followed closely by BMW and Mercedes, due to their lower margins. Nevertheless, analysts suggest that once the situation stabilizes, European manufacturers may become more appealing to investors.
Jefferies highlights the likelihood of mixed responses, including retaliation and exemptions, given the size of this policy shift. In 2024, over 8 million vehicles were imported into the U.S., totaling around $243 billion, with an average vehicle price of $30,300. The new tariffs could add an average of $7,600 to the cost of each vehicle.
The Acea, representing European manufacturers, has voiced deep concerns over the timing of this announcement, which comes at a critical juncture for the industry’s transformation amid intense global competition. The organization notes that European automakers export between 50% and 60% of their production to the U.S., significantly influencing the American trade balance. This situation is expected to drive stocks for General Motors and Ford down by more than 3% in pre-market trading on Wall Street, while Tesla appears to be less impacted.
Autos Dive America, representing European and Asian manufacturers in the U.S. market, warns that these tariffs will ultimately raise production and vehicle costs, leading to more expensive cars, fewer choices for consumers, and potential job losses in the American manufacturing sector.
Conversely, the UAW, which advocates for workers in the industry, has welcomed Trump’s decision. UAW President Shawn Fain stated that these tariffs could help restore thousands of well-paying jobs to working-class communities in the U.S. within a few months. He commended the administration for taking action against what he describes as the detrimental effects of free trade on these communities over the years.
© 2025 Agence Option Finance (AOF) – All reproduction rights reserved by AOF. AOF sources its information from what it regards as reliable channels. However, readers are solely responsible for how they interpret and use the information provided, and must indemnify AOF and its contributors from any resulting claims. Agence Option Finance (AOF) is a brand under the Option Finance group.