Some Asian car and battery makers hit as Trump gets to work (updated)

Samsung SDI

21/01/2025 04:03

(Recasts and adds details throughout)
    By Hyunjoo Jin and Daniel Leussink
       TOKYO/SEOUL, Jan 21 (Reuters) - Shares of Japanese
automakers and South Korean battery makers declined on Tuesday,
after U.S. President Donald Trump said he could impose tariffs
on Canada and Mexico soon and revoked the previous
administration's executive order on electric vehicles.
    But Chinese manufacturers bucked the trend, with stocks
opening higher after Trump did not target China in his
inauguration speech or immediately impose tariffs on Beijing as
previously promised. 
    The volatility in Asian shares within hours of Trump's 
inauguration highlights how policy shifts under Trump could
squeeze big manufacturers in some of Washington's closest allies
in the region, Japan and South Korea. Car makers in both
countries - and their suppliers - already face disruption from
the move to electric vehicles and intense competition from
fast-rising Chinese rivals.
    Trump said that he was thinking of imposing 25% tariffs on
Canada and Mexico and that the action could come on Feb. 1. The
threat of potential tariffs on the two countries has loomed over
Asia manufacturers. Mexico in particular has long been a
low-cost manufacturing hub for automakers, including Asian
heavyweights.
        "President Trump will remain unwavering in his intention
to continue to implement across-the-board additional tariffs as
both a way to resolve issues with other countries and as a means
of reducing the U.S. trade deficit," Takahide Kiuchi, executive
economist at Nomura Research Institute, said in a note to
clients.
  
        Shares of Nissan Motor  7201.T , Japan's third-largest
automaker, erased much of the morning's gains and were flat at
423.9 yen, having risen as high as 437.8 yen in the morning
session. 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.
  
        
  
        'GREAT CONCERN'
  
        Honda Motor  7267.T  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 United States were to impose permanent tariffs
on imported vehicles.
  
        Shares of Honda also reversed early gains and were flat
at 1,483 yen. They had risen as high as 1,526 yen at the open of
trade.
  
        The Trump administration's economic policies are of
great concern to the Japanese economy and Japanese companies. A
slowdown in the U.S. and global economies due to additional
tariffs and other measures will worsen the Japanese export
environment," Kiuchi said in his note, comments that could
likely be applied to other countries in the region.
  
        Shares of South Korea's Hyundai Motor  005380.KS  were
little changed. The automaker also has operations in Mexico. 
  
        In a statement, it said its production there was part of
its long-term, global strategy, adding it was committed to
adapting operations to international environment.
  
        Shares of South Korean battery makers dropped, with LG
Energy Solution  73220.KS  falling some 5%, while Samsung SDI
 006400.KS  and SK Innovation  096770.KS  lost more than 4%
each.
  
        Trump revoked a 2021 executive order signed by his
predecessor, Joe Biden, that sought to ensure half of all new
vehicles sold in the United States by 2030 were electric.
  
    Japanese finance minister Katsunobu Kato said his country
would respond "appropriately" after examining the new
president's policies.



 (Reporting by Hyun Joo Jin, Daniel Leussink, Jihoon Lee and
Brendah Goh; Writing by David Dolan; Editing by Gerry Doyle)
 ((david.dolan@thomsonreuters.com; +81 3 4563 2708;))