US President Donald Trump's 25 percent tariff on imported cars and light trucks, starting next week, has evoked a global reaction, widening the trade war he reignited upon regaining the White House this year.
Auto industry experts predict the move will drive up prices and stymie production.
Wall Street's main indexes opened in the red, with General Motors sinking more than nine percent in early trading while Ford limited losses to under one percent In Tokyo, Toyota, the world's top-selling carmaker, fell two percent, Honda shed 2.5 percent, Nissan was off 1.7 percent and Mazda dived six percent.
Seoul-listed Hyundai gave up more than four percent. Among European auto firms, Volkswagen shed 2.4 percent, Porsche was down around 3.5 percent, Mercedes lost four percent and BMW fell 2.7 percent, pushing the wider Frankfurt stock markets down more than one percent. Peugeot and Jeep maker Stellantis shed more than five percent.
In Mumbai, India's car major Tata Motors, which exports Land Rovers to the United States, lost more than five percent.
Reactions are pouring in from across the globe.
Japanese PM Shigeru Ishiba
"Japan is a country that is making the largest amount of investment to the United States, so we wonder if it makes sense for (Washington) to apply uniform tariffs to all countries. That is a point we've been making and will continue to do so.
"We need to consider what's best for Japan's national interest. We're putting all options on the table in considering the most effective response."
European Commission head, Ursula von der Leyen
"Bad for businesses, worse for consumers."
Canadian PM Mark Carney
"We will defend our workers, we will defend our companies, we will defend our country, and we will defend it together."
Guo Jiakun, Chinese Foreign Ministry spokesperson
"No country's development and prosperity are achieved by imposing tariffs."
Robert Habeck, German Economy Minister
"What counts now is to have a firm response to these tariffs from the EU. It needs to be clear that we will not take this lying down."
"The EU must now give a firm response to the tariffs — it must be clear that we will not back down in the face of the USA."
UK Finance Minister Rachel Reeves
"Trade wars are no good for anyone."
"We are working intensely these next few days to try and secure a good deal for Britain. I recognise how important this is."
Ontario Premier Doug Ford
"President Trump is at it again. His 25 per cent tariffs on cars and light trucks will do nothing more than increase costs for hard-working American families. US markets are already on the decline as the president causes more chaos and uncertainty.
He’s putting American jobs at risk. I've spoken with Prime Minister Carney. We agree Canada needs to stand firm, strong and united. I fully support the federal government preparing retaliatory tariffs to show that we’ll never back down.
Trump said the tariffs are going to spur growth, with the White expecting to raise $100 billion in annual revenue.
Elon Musk, Tesla CEO
"Important to note that Tesla is not unscathed here. The tariff impact on Tesla is still significant.
"This will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial."
Shawn Fain, President of United Auto Workers Union
"We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities for decades ... These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country, and it is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the US."
UBS
"The tariffs could also disrupt supply chains, deter investments, and significantly raise consumer prices, while potentially igniting trade disputes with Europe, Japan, and South Korea"
"We still expect a significant expansion of tariffs, potentially leading to a cycle of tit-for-tat escalation and increased market volatility in the weeks ahead."
JP Morgan
"The steep and broad-based tariffs are likely to cause supply chain disruptions globally, with an immediate hit to original equipment manufacturer (OEM) production, likely greater than the demand hit near-term, driving inventory and days supply lower."
Wedbush
"In our view these initial tariffs (if they hold in their current form) would be a hurricane-like headwind to foreign (and many US) automakers and ultimately push the average price of cars up $5,000 to $10,000."
BMW
"A trade conflict between these economic regions [European Union and United States] would not have any benefits."
"Both sides should therefore promptly find a transatlantic deal that creates growth and prevents a spiral of isolation and trade barriers."
Valeo, French car parts supplier
"We will have to raise prices as a result."
Canadian PM Mark Carney rebukes US President Trump's 25% tariff on foreign car imports, pledging to protect Canadian workers, companies, and the nation.
These are the automakers that are affected by the tariffs:
BMW
BMW's plant in San Luis Potosi, Mexico, produces the 3 Series, 2 Series Coupe and M2, with nearly all output going to the U.S. and other markets worldwide.
Ford Motor Co.
Ford has three plants in Mexico. It exported just under 196,000 cars to North America in the first half of 2024, with 90 percent going to the US, according to Mexico's AMIA.
General Motors
GM imported roughly 750,000 vehicles from Canada or Mexico in 2024 to the U.S., with most made in Mexico, GlobalData says.
Honda
Honda Motor sends 80 percent of its Mexican output to the U.S. market. It warned on Nov. 6 that it would have to consider shifting production if the U.S. imposed permanent tariffs on Mexican imports.
Kia: South Korea's Kia Corp. has a factory in Mexico that makes its vehicles and some Santa Fe SUVs for its affiliate Hyundai Motor for export to the United States.
Mazda
Mazda exported around 120,000 vehicles from Mexico to the United States in 2023, but said it may reconsider further investments if tariffs are imposed.
Nissan
Nissan Motor has two plants in Mexico where it makes the Sentra, Versa and Kicks models for the US market. It produced nearly 505,000 vehicles in Mexico in the first nine months of 2024.
Stellantis
Stellantis operates assembly plants in Mexico making Ram pickups and vans, as well as the Jeep Compass midsize SUV. The group owns two assembly plants in Canada, one where it makes Chrysler models and another scheduled to resume output of a new Jeep model this year.
Toyota
Toyota Motor builds its Tacoma pickup truck at two plants in Mexico, and sold more than 230,000 of them in the US in 2023, or 10 percent of total sales in that market.
Volkswagen
Volkswagen's factory in Puebla, Mexico, made nearly 350,000 cars in 2023, including the Jetta, Tiguan and Taos, all for export to the U.S. In Canada, Volkswagen is building a battery gigafactory in Ontario, with output to begin by 2027. Volkswagen's Audi plant in San Jose Chiapa, Mexico, makes the Q5, employing more than 5,000 people. In the first half of 2024, nearly 40,000 vehicles were exported to the U.S., according to Mexico's AMIA.
