Experts warn that the auto tariffs are a mistake that will be paid for by consumers as price hikes of both imported and domestic vehicles could lead to significant financial strain for buyers.
BEIJING, March 28 (Xinhua) -- The U.S. sweeping new tariffs on auto imports triggered a transatlantic backlash, sending U.S. and European stocks tumbling and igniting threats of retaliatory measures from its major trading partners.
One day after the announcement, U.S. stocks ended lower on Thursday. The Dow Jones Industrial Average dropped 155.09 points, or 0.37 percent. The S&P 500 fell 18.89 points, or 0.33 percent, while the Nasdaq Composite lost 94.98 points, or 0.53 percent.
Shares of European automobile manufacturers also fell sharply. The Stoxx Europe 600 index for carmakers and auto parts manufacturers dropped 1.6 percent, extending a year-long decline of nearly 25 percent, as the sector was already under pressure due to weakening demand, rising fuel costs and the transition to electric vehicles.
Among individual manufacturers, Stellantis, the Italian-French auto giant, suffered the largest decline, falling 4.5 percent. Volkswagen, Europe's largest carmaker, lost 1.5 percent, while Mercedes, BMW and Porsche also saw significant losses.
World leaders have denounced the U.S. government for the new tariff measure.
"The old relationship we had with the United States based on deepening integration of our economies and tight security and military cooperation is over," Canadian Prime Minister Mark Carney said Thursday.
Nothing is off the table to defend Canada and its workers against the U.S. tariffs, said Carney, adding that Canada will respond to the U.S. auto tariffs with retaliatory trade actions, which will have "maximum impacts" in the United States and "minimum impacts" in Canada.
Brazilian President Luiz Inacio Lula da Silva on Thursday warned that his country could take reciprocal trade measures.
Protectionism harms global economic cooperation and undermines multilateralism, said Lula da Silva, expressing the hope that other nations affected by the latest U.S. tariffs will also bring their case to the World Trade Organization (WTO) and adopt reciprocal measures if necessary.
The U.S. move to impose tariffs on auto imports violates WTO regulations and undermines the rule-based multilateral trading system, Chinese foreign ministry spokesperson Guo Jiakun said Thursday.
"China has noted the responses from major U.S. trading partners," Guo told a regular news briefing, stressing that there are no winners in a trade or tariff war, and that no country's development and prosperity can be achieved through imposing tariffs.
European auto associations' responses to the tariffs have also been swift and firm. The European Automobile Manufacturers' Association (ACEA) on Thursday warned that the new tariff measure could harm global carmakers and disrupt U.S. manufacturing.
In a statement, ACEA Director General Sigrid de Vries urged the U.S. administration to reconsider the tariffs, warning that the measure would not only raise costs for American consumers but also hurt manufacturers that rely on imported auto parts to produce vehicles in the United States.
According to ACEA, the export value of EU-made cars to the United States fell 4.6 percent last year to over 38.46 billion euros (about 41.4 billion U.S. dollars). Despite the decline, the United States remained the largest market for EU car exports.
The German Association of the Automotive Industry said that the auto tariffs "send a disastrous signal for free, rules-based trade" and "place a significant burden on both companies and the automotive industry's closely interwoven global supply chains."
"The risk of a global trade conflict -- with negative effects on the global economy and growth, prosperity, jobs and consumer prices -- is high on all sides," said the association in a statement.
The Czech Automotive Industry Association warned that the new tariffs pose a direct threat to the economy of European manufacturers and suppliers, disrupting global supply chains and threatening their competitiveness at a time when the automotive industry is facing a major transformation and increasing international competition.
Experts warn that the auto tariffs are a mistake that will be paid for by consumers as price hikes of both imported and domestic vehicles could lead to significant financial strain for buyers.
Goldman Sachs analyst Mark Delaney believes a 25 percent tariff on imported cars could raise the price by 5,000 dollars to as much as 15,000 dollars, while locally made vehicles would see their prices increase as well because parts tariffs will raise costs to make the vehicle by up to 8,000 dollars. ■
