According to comprehensive foreign media reports, US President-elect Donald Trump said he would impose high tariffs on Canada, Mexico and China, the three major trading partners of the United States, on his first day in office.
Photo: Trump social media screenshot, aiming at China, Trump said in another post that he would impose an “additional 10% tariff” on all Chinese imports on top of the existing tariffs.
Photo: Trump’s social media screenshot, which Reuters believes is the most specific description of Trump’s economic agenda since his victory in the US election.
Mr Trump, citing concerns about illegal immigration and the trade in illegal drugs, especially fentanyl, said tariffs on Mexico and Canada would continue until the two countries took measures against drugs and immigrants crossing the border.
In addition, Trump accused China of not taking strong enough action to stop illegal drugs flowing into the United States across the Mexican border.
Although the above tariff policy is mainly aimed at curbing the illegal trade in drugs and illegal cross-border immigration, it has still caused an uproar in the auto industry.
European auto and parts stocks fell on November 26th, with Volkswagen of Germany falling 2.
1%, while Stellantis, which makes major brands such as Chrysler, Dodge and Fiat, fell the most, down 4.1%. Italian brokerage Intermonte said Stellantis would be “the hardest hit” by US tariffs on Mexican imports because the group imported 358000 cars from Mexico to the US in 2023.
“We estimate that every 1 percentage point increase in tariffs could reduce Stellantis’s pre-tax profit by 160 million euros, equivalent to 1.
4 per cent of its 2025 profit forecast.
” In addition, shares of German luxury brand BMW fell 1.
5%, Volvo fell more than 3%, Daimler trucks fell 3.
4%, and French auto parts maker Valeo fell 2.5%. In fact, not only European car companies, but tariffs are a blow to any other company that has a production base in Mexico.
Korean car companies such as Hyundai Kia, parts companies such as Samsung Electronics and LG Electronics, Toyota, Honda, Nissan and Mazda of Japan export a large proportion of their products in Mexico to the United States.
As Paul Donovan, chief global economist at UBS, said: “the auto industry has a highly integrated supply chain on the U.S.-Mexico-Canada border and is very fragile.
” As for China, it is unclear how Trump’s threatened 10 per cent tariff on all goods would tie in with his previous statement calling for higher tariffs.
“the tariff is specifically aimed at fentanyl trade and does not necessarily mean that Trump’s promised plan to impose a 60 per cent tariff on all Chinese imports will not be implemented,” said Neil Thomas, a political researcher at the Center for China Analysis at the Asian Policy Institute.
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