Donald Trump confirmed fears of the market to the new prices for its commercial partners in the early hours of Tuesday. The new President of the United States announced on his social network Truth Social that one of his first actions, upon his return to the White House, will impose tariffs of 25% on Mexico and Canada, and 10% on China. Trump emphasized, in capital letters, that These new taxes will affect all products imported from these countries. Additionally, he threatened that “these tariffs will remain in effect until drugs, especially fentanyl, and all illegal immigrants stop this invasion of our country.” “Mexico and Canada have the absolute right and power to easily resolve this problem,” the Republican detailed in this publication. And although they are not on this list, European stock markets have suffered the consequences on their prices, he Ibex 35 was one of the most bearish of the day, losing up to 0.80%, although in Europe, other sectors such as automobile They were also punished.
In the Ibex 35, the companies that performed worst during the session were ArcelorMittal and BBVA, as both companies have heavy exposure to China and Mexico, respectively. THE the company of French origin lost 3.8%, while the bank lost 3.3% due to the importance of this country for its activity a bearish day for the financial sector.
In these generalized declines for Europe, the Cac 40 lost 0.9%, while the EuroStoxx 50 lost 0.8%. Monday’s increases, driven by investor optimism following the appointment of Scott Bessent as Treasury Secretary, a Wall Street veteran with experience in funds, were forgotten on the Old Continent given the outlook for increase in customs tariffs for Europe. The sectors most affected that day were basic resources as well as automobiles, yielding 1.9% and 1.7% respectively.
The automotive sector was one of the most penalized in the market of the major European benchmark, the Stoxx 600, and the declines were led by Stellantis, which lost 4.8%, while Volvo and Valeo lost 2.8%. % and 2.5% each. Over the year, European cars lost 16.4% due to the weakness of European industry and the rise of cheaper Chinese vehicles. Analysts have already revised downwards an average of 26% of profit estimates for all car manufacturers on the Old Continent.
In the case of the sector retail It is the fifth with the most declines, losing 1.9% on the stock market, but with automobiles they could be the most affected by Trump’s tariff policies. Holly Froum, analyst at Bloomberg Intelligence, explains that now these taxes “could lead to increased costs for electric vehicle makers such as Volvo and Polestar and clothing makers Nike and Adidas,” as they “will likely face additional tariffs now that Donald Trump returns to the White House.”
“Trump has said he intends to impose tariffs of 10 to 20 percent on most imports and 60 percent on China, which could affect companies like Nike and Adidas, which buy 18 % and 14% of their shoes in this Asian country”, according to the analyst of Bloomberg. Customs tariffs can also affect American companies, explains the expert, and that “Lululemon and Allbirds could also be seen affected by a proposed tariff of between 10 and 20% on imports from other countriesgiven that their products are largely made in Vietnam,” adds Froum.
