President Trump wants Americans to buy fewer European cars and Europeans to buy more American cars. To speed his pipe dream along, on Sunday night he said that new tariffs on EU companies would “definitely happen.” (The ones he announced on Mexico and Canada have been stayed for now.) His threat of 25 percent tariffs on, among other things, car imports from the EU could spark an automotive trade war.
Market reaction to this was predictable: European automaker shares fell yesterday. Stellantis and Volkswagen were down 6.8 and 5.6 percent, respectively. Volvo fell by 6.5 percent, while Mercedes Benz, BMW, and Porsche lost between 3.6 and 4.3 percent.
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