European Auto Stocks Fall on Threat of Higher U.S. Tariffs

Dow Jones05-04 15:47

By Dominic Chopping

European auto stocks fell in early trade as investors reacted to the threat of higher U.S. tariffs on automobiles from the European Union.

President Trump said on Friday that he would increase the tariffs to 25% this week from a previously agreed to 15%, as he accused the bloc of non-compliance with a trade deal signed last year.

Trump announced 25% auto tariffs on EU cars early last year, on top of an existing 2.5% rate, before softening his stance and bringing in a new 15% rate on autos and auto parts imported from the bloc.

That new 15% rate, down from the effective 27.5% tariff, was agreed upon last September in return for the removal of EU tariffs on U.S. industrial goods.

However, while the EU Parliament recently voted to move that legislation forward, it is still subject to talks between lawmakers and representatives from the bloc's member countries.

"It appears that President Trump is angry that the removal of tariffs on U.S. industrial goods that was agreed last September after being proposed in July 2025 has yet to pass through the EU's lengthy legislative process," analysts at Bernstein said.

European automakers have been busy cutting costs and realigning strategies after seeing Trump's tariff regime significantly dent earnings, on top of stuttering electric vehicle demand and a tough Chinese market.

DIHK, the German Chamber of Commerce and Industry, said the threat of new U.S. tariffs is an unnecessary escalation of the transatlantic trade conflict and jeopardizes EU implementation of the trade deal agreed to last year.

"New tariffs would be another blow to our exporters--and this after our exports to the U.S. have already declined by nearly 10% in 2025," said Volker Treier, DIHK's head of foreign trade.

Shares in Porsche, BMW, Mercedes-Benz, Volkswagen, Stellantis and Ferrari all fell between 1% and 2% in early trade Monday.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

May 04, 2026 03:47 ET (07:47 GMT)

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

European Auto Stocks Fall on Threat of Higher U.S. Tariffs

At the request of the copyright holder, you need to log in to view this content

Comments