Shares of Japanese and South Korean automakers, along with their suppliers, plunged on Monday as the region faced a heavy blow from the U.S. President Donald Trump's newly imposed tariffs on Mexico, Canada, and China, reports Reuters.
Despite being anticipated, Trump's tariffs rattled major global manufacturers, sparking concerns about weakened demand from the U.S. and a potential global economic slowdown. Automakers were particularly affected, as many Japanese and South Korean car makers and their suppliers have manufacturing operations in Mexico, which exports vehicles to the U.S.
Toyota, Nissan, and Honda saw significant drops, with Toyota and Nissan falling over 5%, while Honda dropped more than 7%. Nissan exports approximately 300,000 vehicles annually from its two plants in Mexico to the U.S., while Honda exports 80% of its Mexican output to the U.S. market. Both automakers had previously warned of the potential need to shift production if permanent tariffs were imposed.
South Korea’s Kia Motors, with a factory in Mexico, fell nearly 7%, while electric vehicle battery companies and suppliers like POSCO Future M and EcoPro BM saw steep declines of 9.1% and 8.7%, respectively.
Trump’s tariffs, which include a 25% levy on Mexican and Canadian imports and 10% on Chinese goods, spurred concerns about a global economic slowdown. As China’s markets were closed for the Lunar New Year, stocks of Chinese companies listed in Hong Kong reflected the tariff worries. Mexico and Canada have vowed retaliatory tariffs, with Canada imposing a 25% tariff on $155 billion of U.S. goods.
Australia's iron ore miners also took a hit, with shares of companies like Rio Tinto, BH, and Fortescue falling between 2% and 5%, while Taiwanese tech firms with factories in Mexico, such as Foxconn, Quanta, and Inventec, also saw significant drops, with Foxconn down 8% and Quanta dropping 10%.
Concerns about the long-term impact of these tariffs have rattled investors, particularly in sectors with significant cross-border manufacturing and supply chains.
Bd-pratidin English/ Jisan
