European auto stocks plunge as US tariffs on Mexico, Canada kick in

Frankfurt — Shares in European carmakers and automotive suppliers fell sharply on Tuesday, after US tariffs of 25% on imports from Mexico, a major centre for the sector to supply the American continent, took effect.

The Stoxx Europe 600 Automobiles and Parts index was down 3.8%, reflecting exposure to the tariffs as companies such as Volkswagen, Stellantis and BMW all have manufacturing facilities in Mexico.

According to data from Mexico’s automotive industry association, Stellantis and the Volkswagen Group — which includes Audi — are the two biggest European exporters of light vehicles to North America from Mexico.

German automotive supplier Continental, which provided a bleak outlook for 2025 on Tuesday, said it would now analyse what the tariffs meant for its sites in Mexico and Canada before taking any decisions.

“It’s therefore all the more important for Europe as an industrial location that the EU supports an open trade regime in the long term,” Continental CEO Nikolai Setzer said.

The group’s shares were down 8.4%.

The tariffs are a particular pain for Germany’s export-orientated carmakers, which all have major production hubs in the US but also have built capacity in Mexico, drawing criticism from European policymakers.

“The EU will not be pushed around,” Germany’s economy minister Robert Habeck said. “If President [Donald] Trump imposes the announced tariffs on EU products, we will react with unity and self-confidence.”

Reuters