The logo of German car manufacturer Volkswagen can be seen on a vehicle in front of a VW dealership.
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Shares of some of Europe’s biggest automakers plunged on Monday morning after US President Donald Trump announced he would impose tariffs on several European countries over Greenland.
Europe’s STOXX Auto Parts Index was trading 2% lower at around 8:41 a.m. London time (3:41 a.m.).
german volkswagen, BMWand mercedes benz group ‘s Milan-listed shares were trading 2.6% to 4.4% lower during early trading. ferrari It fell by about 2%.
Milan listed stocks StellantisThe company, which owns big names like Jeep, Dodge, Fiat, Chrysler and Peugeot, was last down 2.1%.
The move comes shortly after President Trump on Saturday pledged to impose 10% tariffs on Britain, Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland by February 1, stepping up efforts to make Greenland, an autonomous territory of Denmark, part of the United States.
President Trump said taxes on these countries would increase to 25% starting June 1.
European political leaders are expected to hold emergency talks in the coming days to consider a response.
The automotive sector is widely considered to be highly vulnerable to the levy, particularly given the high degree of globalization of its supply chain and dependence on manufacturing operations across North America.
“Ultimately, our view is that tariffs are a blunt instrument and are unlikely to be effective over the long term,” Rob Brewis, director and investment manager at Aubrey Capital Management, told CNBC’s “Early Edition of Europe” on Monday.
“Obviously, this tariff caused quite a stir last April, but I think the impact has faded over time and repeated use since then,” he added.
Asked which European sector is most likely to be threatened by President Trump’s latest tariffs, Brewis pointed to the auto industry.
“I’m focusing more on emerging markets, so I’m spending less time in Europe, but I don’t think that’s going to help sectors like the auto sector, which already faces a big threat from the Chinese,” he added.
