In the midst of a trade war between Europe and China, a growing number of new fear of European car brands: that its good trade deal with the US is shaken. The attack against Donald Trump last weekend It is catapulting him to the presidential chair and that could mean greater protectionism.
This is already being felt on the stock market, with the drop in value of some European car companies. But there is also concern that The US ends up imposing tariffs on cars imported from Europe.
More protectionism, less free trade
Trump Not only is he gaining ground in the race for the White House, he has also chosen JD Vance as his second in command, who would be vice president if the Republicans win the elections in November. Conservative and climate change denierjust as Trump is leaning towards More protectionist policies that promote Make America Great Again.
The US and Europe enjoy the best trade deal on the planet and that could change if there is a change in the presidency. And even more so if we are talking about electric cars, which European brands are increasingly betting on when in America they are considering the opposite to save their industry. What’s more, to win the favour of the oil companies, he has promised to wipe out the electric car if he wins the elections.
“Given that Trump’s strategy is to put America first, it’s hard to imagine a Trump presidency being good for non-US asset markets,” notes Michael Metcalfe, director of macro strategy at State Street, for example. According to Reuters.
20% tariffs on European cars? One of the biggest fears is that the US will impose tariffs on cars imported from Europe. Barclays predicts that they could be subject to 20% tariffs. This would mean more expensive European cars on the US market, which is never good for sales.
All in a market where Europeans are not the favourites: Japanese companies such as Toyota, Nissan and Honda share the cake as the best-selling companies alongside North Americans. Koreans also do so. However, for some European companies, the US remains a very important market.
This would be a serious setback since, in addition, China is considering imposing 25% tariffs to high-capacity petrol cars imported from Europe in retaliation for the new tariffs on electric cars. It would mainly affect premium brands such as BMW and Audi, even more than luxury brands such as Porsche, Ferrari and Bentley.
Let us remember that the US has increased tariffs on Chinese electric cars by 100%, but sees Europe as an ally against this common enemy. A preventive measure, since no Chinese electric car is sold on American soil. Quite the opposite of zero-emission European cars.
Shares fall for brands that sell a lot in the US While tariffs on European cars are a possibility, the aftermath of Saturday’s attack has seen a drop in the shares of several European brands. As a result, there has been a wave of selling of shares since Monday as investors fear they will continue to lose value.
Porschewhich is one of the brands that depends most on its exports, has seen its shares fall by 5.7% in recent days. The North American market is the most important for the Stuttgart firm: In 2023, it received 26.9% of its sold carsahead of China (24.8%). More than 86,000 models of the brand were sold in the US and Canada last year.
It’s not the only one. Volvo shares have fallen by 1.89% compared to yesterday and tomorrow Mercedes-Benz 0.46%down 1.26% in the last five days. For the star brand, the US is its third market, behind China and Europe, and it was the foreign brand that sold the most electric models there. For Volvo it is also the third market, although in its case Europe is the first and China the second.
Overall, the European stock market capitalisation index (STOXX Europe 600) has fallen by 1% over the past two months, while the US indicator has increased by 6% over this period and by 3.5% over the past month.
Source: www.motorpasion.com
