Market Overview

Trump Threatens 20% Tariffs On EU Cars

Trump Threatens 20% Tariffs On EU Cars

In the midst of a burgeoning trade war, President Donald Trump has laid down a fast and furious ultimatum.

“Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump tweeted Friday.

Why It’s Important

Foreign automakers sold off sharply on the tariff threat, which, if executed, could diminish their U.S. margins or, if averted, result in increased competition in their home markets.

Fiat Chrysler Automobiles NV (NYSE: FCAU) fell 1.8 percent, while the European stocks of BMW and Daimler fell 1 percent and 0.7 percent, respectively.

Even U.S. companies expected to profit from Trump’s terms stumbled on the news. Ford Motor Company (NYSE: F) dropped 1.2 percent and General Motors Company (NYSE: GM) 1.4 percent. Ferrari (NYSE: RACE) was down about 1 percent.

Harley-Davidson Inc (NYSE: HOG) also appeared to fall on the news, down 1.8 percent.

What’s Next

Trump previously threatened 25 percent tariffs, so the number may be amended again shortly.

Related Links:

Trump Approves Tariffs On About $50 Billion Of Chinese Goods

Analysis: Negative Reaction To Trump's Tariffs Could Make Him More Likely To Act


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