Asian auto stocks extended losses on Friday after US President Donald Trump confirmed a new 25% tariff on imported vehicles and key auto parts, fuelling fears of a global trade war.
The White House announced that the tariffs, effective 2 April, will apply to all imported passenger vehicles and light trucks, as well as essential components such as engines and transmissions. The move follows a broader protectionist push from Trump, who has labelled the deadline “Liberation Day.”
Japan’s largest automakers led the decline. Toyota fell 4.29%, Honda dropped 4.24%, Mazda slid 3.99%, and Mitsubishi lost 1.27%. Nissan, which operates three factories in Mexico, declined 1.63%.
In South Korea, Hyundai Motor fell 3.53%, while Kia Motors—also with a Mexican manufacturing presence—dropped 2.66%.
Chinese electric vehicle makers were also affected. Nio’s Hong Kong-listed shares fell 7.83%, while Xpeng and Li Auto slipped 0.57% and 0.78%, respectively.
Goldman Sachs estimated that the tariffs could raise prices on imported cars by US$5,000 to US$15,000. Domestically manufactured cars, which often rely on foreign components, could see price increases of up to US$8,000, according to analyst Mark Delaney.
More than 90% of US vehicle imports come from five trading partners: the European Union, Canada, Mexico, South Korea, and Japan. Several of these countries have signalled plans to retaliate. Newly elected Canadian Prime Minister Mark Carney declared, “We will respond forcefully. Nothing is off the table to defend our workers and our country.”
Trump has warned that if Canada and the EU coordinate their response, “far larger” tariffs could follow.
The White House stated that for vehicles covered by the United States-Mexico-Canada Agreement (USMCA), importers will be allowed to certify the US content of their products. The 25% tariff will only apply to non-US content, once a tracking method is established by the Commerce Secretary and US Customs and Border Protection.
Eurasia Group, a political consultancy, noted that this implementation process adds complexity, especially for the application of duties to auto parts.
Major US automakers also fell in Thursday trading, with shares in Ford and General Motors both declining sharply.
