9:21 am, November 7, 2024
Share values of European carmakers fell after the announcement that Donald Trump would become the next president of the USA, causing further woes for shareholders of manufacturers that are already under significant financial pressure.
BMW saw its share value drop by 6.6%, Mercedes-Benz by 6.4%, Porsche by 4.9% and Volkswagen by 4.3% as investors analysed the potential impact of a Trump victory.
The president-elect has already made it clear that he is no fan of electric vehicles and has committed to drill for further oil reserves in his early presidency, though it’s possible that his close alliance with Tesla CEO could see a tariff-led approach toward imported cars, rather than a hard-set anti-EV stance.
Trump has already proposed steeper tariffs on foreign-made cars to protect US jobs, including in Michigan – which was one of the seven key swing states in the US election.
Chancellor of the Exchequer, Rachel Reeves yesterday said the UK Government would make ‘strong representations’ to the incoming president and continue to make the case for free trade.
Any tariffs on imported cars could have a major impact on cars built in Britain, with the US currently the industry’s second biggest trading partner after the EU.
The SMMT has now called on the Government to work with the Trump administration to find a solution in order to ‘support sector jobs’.
Mike Hawes, SMMT chief executive, told Car Dealer: ‘The US is the UK automotive sector’s second biggest trading partner after the EU, with reciprocal trade and investment between both countries creating high-value jobs and boosting both economies over many years.
‘The UK should work with the new US administration to enhance this cooperation and seek mutual benefits, helping support sector jobs and growth across the Atlantic.’
Trump also implied last month hat he was considering targeting German cars. At a campaign rally in Savannah, Georgia, the President elect said: ‘I want German car companies to become American car companies. I want them to build their plants here.’
Shares in General Motors and Ford both rose by 4% in pre-market trading in the belief that a Trump presidency will be good for business.
Chrysler and Jeep owner, Stellantis, rose by 1.3% and Tesla shares leapt by 13% in morning trading, as investors speculated that Musk’s support of Trump would benefit the company.
US companies are also expected to benefit from corporate tax cuts under Trump, as well as greater protectionism and an expected relaxation of emissions rules.
Chinese carmakers are unlikely to be affected as they are already subject to 100% tariffs, significantly limiting their appeal in the US market.
(Main image: Evan Vucci/AP) Additional reporting by Jack Williams.
