Trump's tariffs hit luxury European automakers hard

On Wednesday at 14:00 GMT, the US president announced that he would impose a 25% tariff on cars imported into the US. According to some analysts, this will significantly affect European producers.

Donald Trump's proposed 25% tariffs on cars will particularly impact luxury brands like Audi, Porsche, and Ferrari, whose vehicles are entirely imported to the US, calculates Walter Bloomberg in his analysis posted on X. BMW and Mercedes, for whom the American market represents about a quarter of their sales, will also feel the consequences. Although around half of their cars sold in the US are assembled locally, key parts are still imported.

Stellantis, which derives half of its revenue from the US and produces about 60% of the vehicles sold there locally, will be vulnerable to a drop in demand. Volkswagen, for which the US represents a small percentage of sales, is in a better position thanks to sourcing most parts in North America. Only Renault remains without any exposure to the American market.

European stock markets are reacting with sharp declines. Automotive companies are losing more than 5% of their value, and German and French stock indexes are experiencing significant drops.

On the Frankfurt stock exchange, Mercedes-Benz is losing as much as 5.53%, reaching a level of €54.82 per share. This company may be one of the most brutal hits, as analysts say only half of the cars of this brand sold in the US are assembled locally, while key parts are still imported.

Porsche is experiencing similar losses, with its shares dropping by 5.34% to €47.33. The situation for this brand is even more challenging – according to experts, all Porsche models sold in the US are entirely imported from Europe.

Other German automotive companies are also under intense selling pressure. BMW recorded a decline of 4.61%, and Volkswagen shares lost 3.68% of their value. In the case of Volkswagen, analysts point out that the US represents a small percentage of its global sales, and most parts are already sourced in North America.

In Paris, Stellantis, the owner of brands like Peugeot, Citroën, and Fiat, is taking the most brutal hit, with its shares dropping by 5.56%. According to analysts, Stellantis generates about half of its revenue in the American market, and about 60% of the vehicles sold in the US are assembled locally. However, the company remains very sensitive to a drop in demand.

The German DAX index, in which automotive companies have a significant share, lost 1.44%, falling to 22,518 points. The French CAC 40 also declined 0.93%, reaching 7,956 points.

CD Projekt (a decline of 7.97%) and Allegro (a decline of 3.39%) recorded the most significant losses, although this is not directly related to Trump's decision.

President Trump announced on Wednesday at 14:00 GMT that he would impose a 25% tariff on all cars imported from abroad. The previous rate was just 2.5%. This tenfold increase dramatically changes the economics of car exports to the US.

During the announcement in the Oval Office, the president emphasised: "We'll effectively be charging a 25% tariff. But if you build your car in the United States, there is no tariff."

Trump signed an executive order that he claims will increase car production in the US. The decision is intended to encourage foreign companies to relocate production to the US.

According to estimates from the American administration, the new tariffs are expected to add an additional $100 billion to the US budget. The president's strategy is to strengthen the American automotive industry and protect domestic jobs.

However, market experts indicate that the decision could be a double-edged sword. Higher prices for imported cars may affect American consumers and limit the availability of specific models on the market, potentially leading to a rise in prices of locally produced vehicles.