Stocks in certain German car manufacturers and suppliers were trading lower in pre-market trade on Thursday following President Donald Trump's announcement of 25 per cent tariffs on imported vehicles, a decision posing a risk to Germany's already ailing auto sector, per a Reuters report.
According to pre-market data from Lang & Schwarz, shares in BMW (BMWG.DE) were recorded 2.3 per cent down, while Daimler Truck (DTGGe.DE) fell by 1.9 per cent. Stock in parts provider Continental (CONG.DE) was observed down 3.9 per cent.
Germany's VDA automotive lobby criticised the new taxes as a "devastating signal" for free, rules-based commerce, cautioning that it would negatively impact businesses and international supply chains. The president of VDA, Hildegard Mueller, stated that the German automotive sector is urging prompt discussions between the US and EU regarding a bilateral agreement.
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Nevertheless, a study conducted by the IfW economic institute discovered that Germany would not be the most severely affected, as reported by the FAZ newspaper.
The institute predicts that Germany's GDP will decline by 0.18 per cent in real terms in the year following the tariff implementation, in contrast to -1.81 per cent in Mexico and -0.6 per cent in Canada. "In general, export losses are contained since vehicles are frequently manufactured near the market where they are sold," stated IfW trade economist Julian Hinz in remarks cited by FAZ.
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