European carmaker shares drop following Trump tariff plans

Shares in some of Europe’s biggest carmakers have dropped following US President Donald Trump’s decision to put 25% tariffs on imported vehicles.

The sell-off kicked off soon after stock markets opened on Thursday.

Aston Martin, which is listed on the London Stock Exchange, saw its share price fall about 6% shortly after opening.

Shares in German giant BMW Group, which is listed in Frankfurt, fell about 4%, and Volkswagen Group was down about 3%.

BMW is the parent company to Mini and Rolls-Royce Motor Cars, while Volkswagen Group comprises brands including Audi and Seat.

Germany’s top stock market index, the Dax, was falling by about 0.9% on Thursday morning.

The US is an important market for cars made in the UK and Europe and exported abroad.

The White House said the move on tariffs will help foster manufacturing within the US, while raising 100 billion US dollars (£77 billion) annually.

But trade group the Society of Motor Manufacturers and Traders (SMMT) warned the move risks hurting both UK and US manufacturers and consumers.

Chancellor Rachel Reeves said the UK Government was in “extensive” discussions with the US about what the tariffs will mean for the UK.

Lindsay James, investment strategist at wealth management firm Quilter, said: “Europe will be heavily impacted, with the US accounting for over a fifth of the EU export market and around 18% of UK auto exports.

“In a sector that is vital for the European economy in particular, accounting for around 7% of GDP (gross domestic product) and 6% of employment, there will an obvious blowback on a sector that has already faced considerable headwinds from a painful transition to EVs alongside tighter regulations, in addition to slower replacement cycles from drivers and higher energy costs.

“This has led to the European autos index falling to a level that is more than 15% lower than a decade ago even before this latest blow.”