By Kosaku Narioka
Asian stock markets declined after President Trump said he would impose 25% tariffs on global automotive imports to the U.S., rekindling concerns about trade frictions between the U.S. and its trading partners.
Japan's Nikkei Stock Average was down 0.7%, South Korea's benchmark Kospi was 0.5% lower and Australia's S&P/ASX 200 was down 0.6%. Japanese and South Korean auto stocks were leading the declines.
Trump said the U.S. will start collecting the auto tariffs on April 3, the day after he is set to announce a broader slate of trade actions. The 25% tariff will be added on top of existing duties, including a 2.5% tariff currently imposed by the U.S.
Toyota Motor shares were recently down 3.2%, Nissan Motor was 3.0% lower, Honda Motor was off by 2.3%. Hyundai Motor was 2.9% lower and Kia was down 1.7%.
The U.S. auto tariffs could negatively affect sales of Japanese and South Korean cars or their profitability in the U.S. market. Toyota, for instance, sold 2.3 million cars in the U.S. last year. Of that, about 23% were exported from Japan.
Nearly half of new passenger vehicles sold in the U.S. in 2024 were assembled outside the U.S., according to data from S&P Global Mobility. Mexico is the biggest auto exporter to the U.S.
Hyundai Motor announced at the White House on Monday that it would invest an additional $21 billion in U.S.-based car manufacturing and supply chains for critical materials, including a $5.8 billion steel mill to be built in Louisiana.
President Trump credited the South Korean company's investment to his aggressive use of tariffs to discourage companies from relying on imports to supply operations in the U.S.
The new U.S. tariffs will cover finished automobiles and automotive parts, a senior administration official said. Parts that are compliant with the U.S.-Mexico-Canada Agreement will remain tariff-free until the Commerce Department "establishes a process to apply tariffs to their non-U.S. content," White House deputy press secretary Harrison Fields wrote online.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
March 26, 2025 21:12 ET (01:12 GMT)
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