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European automaker stocks, including Volkswagen (VOW3.DE), Mercedes-Benz (MBG.DE), and BMW (BMW.DE), are under pressure as President Trump's sweeping tariff policy takes effect. Yahoo Finance Senior Reporter Pras Subramanian joins the show to take a closer look at the tariff impact.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Automaker stocks are extending losses as President Trump's sweeping new tariffs take effect. This after the U.S. implemented a 25% duty on all cars imported into the country. Yahoo Finances Pras Subramanian is here now with a closer look at the impact here. Pras, what do we know so far?
You know, we're seeing European automakers falling today. This has been a continued decline since these tariffs have been sort of hinted at and now in fully in effect for, you know, 25% on autos, that does not, that's not, we're not going to include any reciprocal tariffs or it's just a pure auto tariff, right? So that's still not good but not great. Um, you know, we're seeing that a lot of these European automakers like BMW, Mercedes, Volkswagen even are a lever to the U.S. because of their exposure there, but they also have factories here too so they can they can try to alleviate that. I was also surprised to see that, uh, it's funny enough that the US automakers have the most exposure to imports here because they import a lot of cars from Mexico and Canada, right? Those are and they sell mostly in the US, they don't sell elsewhere, so that's it affects them as well. So just a massive amount of cost layered on here, um, on a cost sensitive business. And then finally, I saw a report today about how, um, the tariffs on US goods to in China actually does affect some automakers here. GM has a export business with a lot of their SUVs going to China recently. That's that's, these are all built here. Um, also Ford imports a lot of Lincolns there to China, which is a big deal, and also BMW because they have a big plant in South Carolina where they make all their SUVs. Those also go to China, although they've been localizing some of their production, still a decent amount, 20 to 30,000 vehicles goes to China. That's going to be hit with these massive tariffs there. So, uh, it's not just a problem for European automakers, it's also US automakers and also even some that export from the US.
Right. And it's clear that given the amount of exposure you just laid out, prices are going to go up. Have you heard reports of consumers panic buying cars ahead of any tariff impact?
So we saw sales in Q1 pretty strong across the board for most automakers and in particular March was was a very strong month for automakers and that kind of hints at the fact that people were getting ahead of the tariff curve. And we were at a New Jersey dealership about a week and a half ago and in that that floor was humming at the end of March was humming. A lot of people there coming and wanting to get
Which is usually a down month.
No, no, no, I mean typically it was a normal day, a normal end of the month, usually busy, but dealers were telling me that this is more activity than we're used to, on top of the fact that, you know, the seasonality. Um, but but it's really kind of concerning that that's happening right now. And I'm also seeing websites. I don't know if you guys have seen various automotive websites. Oh, these are our tariff-free cars. They're listing their cars that they say they claim are tariff-free. So it's already happening.
Huh.