Donald Trump announced last night, while European stock exchanges were closed, a new 25% tariff aimed directly at the automotive sector outside the US, expected to come into effect on April 3, a day after the rest of the American president's tariffs.
In general, Trump's announcement has colored in red the main European indices at the opening of the stock exchanges, with the German market being the most affected with a drop of 1.4%, given its high exposure to the automotive sector. Following closely in the decline were the Milan stock exchange with cuts of 1.28%,1.07% for Paris, and 0.54% for London. In the case of Spain, the Ibex 35 started Thursday's session with a 0.78% decline.
Analysts' forecasts this morning suggest a day of widespread losses following Trump's latest announcement. In his address last night from the Oval Office, the American president explained that they expect to raise up to $100 billion a year with their tariff measures, something that will lead to "tremendous growth" for the automotive industry, as well as boosting employment and investment in the US. However, the initial reactions were declines in their own territory: General Motors shares fell by approximately 3% after the announcement.
The automotive market in the North American country has a high foreign presence, with Mexico being the main supplier, followed by South Korea, Japan, Canada, and Germany.
Looking at Europe, in a context where the Old Continent imposes a 10% tariff on vehicle imports from the US, while the US currently responds with 2.5%, Trump's new tariff implies "bad news for the automotive sector in general," as noted by analysts at Bankinter in their Thursday forecasts. The entity points out that among European manufacturers, Mercedes would be the most affected, as it exports around 55% of its sales to the US from Europe, compared to 35% for BMW and Volkswagen.
At the opening of the stock market, declines were also seen in the commodities market: the price of a barrel of Brent crude oil, a reference for the Old Continent, stood at $72.88, a 0.25% decrease, while Texas crude fell by 0.27% to $69.46.
In the currency market, the euro's exchange rate against the dollar was at 1.0761 dollars, while in the debt market, the yield on the 10-year bond rose to 3.385%.