Shares in European carmakers sank on
Tuesday as trade tensions between the US and Canada escalated.
The auto sector shed 2.7%.
Stellantis recorded the most sharp drop, down by 6%.
Volkswagen fell by 3.2% in afternoon trading, along with
Mercedes (-2.5%), Porsche (-2.8%), Bmw (1.9%), Ferrari (-1.6%).
Renault was only down 0.4%.
Stellantis and other carmakers that sell to the US and have
major production operations in the countries targeted by
tariffs, including Volkswagen, are currently benefiting from a
temporary tariff reprieve if they comply with the United
States-Mexico Canada Agreement (USMCA.)
However, Stellantis, which has production facilities in Canada,
and other carmakers could be significantly affected by Tuesday's
escalation.
US President Donald Trump said on Tuesday that he was doubling
tariffs on Canadian steel and aluminum from 25% to 50% as a
retaliation for the province of Ontario's imposition of a 25%
surcharge on electricity exports to several US states.
Trump also posted on his Truth social media platform on Tuesday
that "if other egregious, long time tariffs are not likewise
dropped by Canada, I will substantially increase, on April 2nd,
tariffs on cars coming into the U.S. which will, essentially,
permanently shut down the automobile manufacturing business in
Canada".
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