Asia automakers lead the decline as region takes a beating from Trump tariffs

Posco Future M

03/02/2025 04:02

* 
      Asian car makers hit by US tariffs on Mexico, Canada,
China
    

        * 
      Japanese, South Korean automakers face export challenges
due to
tariffs
    

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      Mexico, Canada plan retaliatory tariffs; impact on global
growth
expected
    

  
       Feb 3 (Reuters) - Shares of Japanese and South Korean
car makers and their suppliers led declines in Asia on Monday,
as exporters across the region were walloped by U.S. President
Donald Trump's introduction of sweeping tariffs on Mexico,
Canada and China.
    The move by Trump, though widely expected, knocked some of
the world's biggest manufacturers, as investors grappled with
the prospect of weakening demand from the world's top economy
and, more worryingly, the possibility of a downturn in global
growth. 
    Automakers were among the hardest hit. Many Japanese and
South Korean car makers, and their suppliers, have operations in
Mexico and have long exported cars made there to the United
States.
     Toyota  7203.T , the world's top automaker, and smaller
rival Nissan  7201.T  fell more than 5%. Honda  7267.T  tumbled
more than 7%.
    Nissan has two plants in Mexico, where it makes the Sentra,
Versa and Kicks models for the U.S. market. It exports about
300,000 vehicles to the U.S. a year, Chief Executive Makoto
Uchida said in November. 
    Honda sends 80% of its Mexican output to the U.S. market,
and its chief operating officer Shinji Aoyama warned in November
it would have to think about shifting production if the U.S.
were to impose permanent tariffs on imported vehicles.
    South Korea's Kia Motors  000270.KS  which has a factory in
Mexico, fell nearly 7%. South Korean electric vehicle battery
firms and battery materials makers, which had plans to build
factories in Canada to supply to GM, Ford and other companies
slumped. POSCO Future M  003670.KS  and EcoPro BM  247540.KQ 
dived 9.1% and 8.7%, respectively. 
    Trump imposed 25% tariffs on Mexican and most Canadian
imports and 10% on goods from China. While mainland China's
markets are closed for the Lunar New Year holiday, Chinese
stocks listed in Hong Kong slid on Monday, reflecting the
concern about the tariffs. 
    Mexico and Canada have vowed to impose retaliatory tariffs,
with Canadian Prime Minister Justin Trudeau announcing 25%
tariffs against $155 billion of U.S. goods.
    Australia's big iron ore miners, BHP  BHP.AX , Rio Tinto
 RIO.AX  and Fortescue  FMG.AX  were down between 2 and 5
percent on Monday on prospects the tariffs would stunt global
growth.
    Rio Tinto was seen as most exposed due to its Canadian
aluminium business, which analysts estimate sells around
1.35-1.6 million metric tons into the U.S. and which would
likely be rerouted to other markets. The tariffs would likely
mean a 4% impact to its earnings before interest, taxes,
depreciation, and amortization (EBITDA), according to analyst
Glyn Lawcock of Barrenjoey.
    Shares of Taiwanese tech companies with factories in Mexico
fell, with Foxconn  2317.TW  down 8%, Quanta  2382.TW  down
around 10% and Inventec  2356.TW  down 8%.

 (Reporting by David Dolan in Tokyo, Melanie Burton in
Melbourne, Ben Blanchard in Taipei, and Hyun Joo Jin in Seoul
Editing by Shri Navaratnam)
 ((david.dolan@thomsonreuters.com;))