(Reuters) – U.S. President Donald Trump said late on Wednesday that the United States will effectively charge a 25% tariff on all cars not made in the country and that the new duties on cars and light trucks imported into the United States will be permanent.
Shares of General Motors and Ford fell in extended trade after Trump’s announcement, while shares of Tesla initially fell then bounced after he said the tariffs could be neutral for Tesla.
COMMENTS:
CHUCK CARLSON, CHIEF EXECUTIVE OFFICER, HORIZON INVESTMENT SERVICES, HAMMOND, INDIANA
“I’ve been kind of suspect on all the tariff talks in terms of what is going to last, what is a negotiation, what is going to be pulled at the last minute. My initial reaction was this tariff might have some legs.”
“There’s probably going to be some exemptions or modifications for some of the U.S. automakers… I could see the U.S. automakers getting some exemptions based on their supply chains. But I think he may want to see how this works out as opposed to stopping it in two or three days. That’s my initial reaction, that this particular tariff might have legs in terms of its longevity.”
PRASHANT NEWNAHA, SENIOR ASIA-PACIFIC RATES STRATEGIST, TD SECURITIES, SINGAPORE
“These auto tariffs are likely on top of other tariffs on steel, aluminum, copper and the impending reciprocal tariffs to be announced on 2nd April. It’s hard not to interpret this as anything but a cue for higher prices and lower growth with a soft landing becoming more complicated. Countries most exposed to the new auto tariffs are Slovakia, Mexico, South Korea and Japan. Keep an eye on stocks of car makers, the Korean won and Mexican peso.”
KYLE RODDA, SENIOR FINANCIAL MARKET ANALYST, CAPITAL.COM, MELBOURNE
“There are a lot of layers here. However, I think the big concern is that not only will these tariffs be disruptive and economically harmful, but it indicates that the Trump administration’s shake-up of global trade won’t necessarily end with next week’s April 2nd announcement of reciprocal tariffs, as previously hoped. This potentially drags out trade uncertainty even longer and raises the question of how radical a change to the global trade order is Trump trying to bring about.”
(Compiled by the Global Finance & Markets Breaking News team; Editing by Jamie Freed)
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