Shares in some of the biggest European carmakers dipped on Monday following the announcement of sharp tariffs by U.S. President Donald Trump on several countries and a possibility for potential levies on the European Union.
Trump imposed 25% tariffs on goods from Mexico and Canada and an additional 10% levy on imports from China while also raising concern over possible duties on EU imports.
Stellantis and Volkswagen, which have major operations in Mexico and are particularly vulnerable to tariffs, were down 6.8% and 5.6%, respectively.
Volvo Cars shares were down 6.5%, while Mercedes Benz, BMW and Porsche lost between 3.6% and 4.3% by 9:21 a.m. GMT.
French car parts supplier Valeo, meanwhile, was down 7.4%.
Europe's automobiles and parts index retreated by 3.7% to more than two-week lows, the most among other sectoral indices on Europe's STOXX 600, which slipped by 1.4%.
Analysts fear the tariffs on Mexico could be more damaging for European carmakers and their suppliers than any direct tariffs on EU goods.
"We believe around 8 billion euros ($8.2 billion) of VW's revenues are impacted by tariffs and around 16 billion euros of Stellantis revenues," analysts at investment bank Stifel wrote in a note.
They estimated the full impact of tariffs to be about 12% of Volkswagen's operating income in 2025 and 40% at Stellantis.
Volkswagen said on Sunday that it was counting on talks to avoid trade conflict.
JPMorgan analysts said in a note they expect companies to give commitments to the U.S. government this week on jobs and vehicle production in the U.S. rather than Mexico and Canada.
The tariffs are due to take effect at 5:01 a.m. GMT on Tuesday.
