European auto giants' shares fall amid Trump's new duties over Greenland
New duties announced by Trump could cut European automakers' underlying profits by $3.5 billion, analyst estimates
The auto industry could come under the most pressure from Trump's new duties of any European sector, an analyst has warned / Photo: Andrew Zaikovskyi / Shutterstock
Shares in major European automakers fell at the start of the EU trading day on Jan. 19 after U.S. President Donald Trump threatened to impose 10 percent duties on goods from several European countries over their stance on Greenland.
Shares of German carmaker Volkswagen lost 2.87% in Frankfurt, BMW -4.35%, Mercedes-Benz -3.57%. Ferrari's shares, listed on the Milan Stock Exchange, fell a little more than 2%. Shares of Stellantis, which owns brands such as Jeep, Dodge, Fiat, Chrysler and Peugeot, lost about 1.5% in Milan.
The Stoxx Automobiles and Parts sectoral European index fell about 2.5 percent on Jan. 19.
What the analysts are saying
The automotive sector is considered highly vulnerable to duties, especially given the highly globalized supply chain and heavy reliance on manufacturing operations in North America, CNBC writes. Rob Brewis, director and investment manager at Aubrey Capital Management, told the channel that the automotive industry is the most vulnerable to pressure in Europe due to Trump's recent threats to impose duties.
Automakers are already under pressure because of the duties imposed by Trump, which currently amount to 15% on most cars and components imported from the EU to the U.S., Bloomberg recalls. In addition, the agency notes, car companies are also facing difficulties due to falling sales in China and slower than expected transition of motorists to electric cars.
Overall, the duties Trump announced on Jan. 17 on goods from eight European countries could cut underlying profits at German, British and Swedish automakers by about €3 billion ($3.5 billion) on an annualized basis, Bloomberg Intelligence analyst Michael Dean calculated.
Context
Trump said new 10 percent duties on all imported goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland will begin on February 1 and could later be increased to 25 percent on June 1 if EU countries and the US fail to reach an agreement on Greenland.
This article was AI-translated and verified by a human editor
