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European automakers also tumbled, with Stellantis down 5.2%, Mercedes-Benz off 5%, and BMW falling 4.4%.
Asian auto stocks were similarly hit, with Hyundai, Kia, Toyota, and Mazda recording sharp losses. The Nikkei 225 ended 0.6% lower, while South Korea’s Kospi slid 1.39%. European auto indices plunged 3.3% in early trading.
Tariffs Extend to Key Auto Parts
The 25% duty applies not only to finished vehicles but also to critical components like engines, transmissions, and electrical systems—though these will phase in starting May.
Vehicles assembled in the U.S. using American-made parts may escape the new charges, but uncertainty remains high. Trump emphasized that carmakers must “build in the U.S. or pay the tax,” pressuring foreign and even some U.S.-based firms relying on global supply chains.
International Backlash and Trade War Fears
The European Union and Canada voiced strong opposition, with Canadian Prime Minister Mark Carney calling the move a “direct attack” and hinting at retaliatory measures.
Trump warned of even larger tariffs if those nations collaborate against U.S. interests. Meanwhile, emerging market leaders like Brazil signaled WTO action was under consideration. Analysts fear the tariffs could spark wider trade tensions, especially with reciprocal duties set for April 2.
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