Daimler Truck, Traton shares fall on Trump’s truck tariffs

Shares in Germany’s Daimler Truck and Traton fell on Friday after U.S. President Donald Trump introduced tariffs on heavy-duty vehicles, including to commerce tensions which have hit the automotive sector laborious.

Along with a barrage of tariffs in different sectors, together with on prescription drugs, Trump stated on Thursday the U.S. would impose duties of 25% on imports of industrial quality vehicles from October 1.

The information comes after Brussels and Washington in July agreed that the majority items getting into the U.S. from the EU, together with automobiles, could be topic to a 15% baseline tariff, and that this could not be added to any present charges.

IMPACT NOT YET CLEAR
Germany’s auto {industry} affiliation referred to as the transfer “incomprehensible”, including “extra commerce obstacles wouldn’t solely additional burden funding and jobs within the U.S., but additionally weaken provide chains and improve prices”.

Daimler Truck’s inventory was down 2% at 1413 GMT, whereas shares in Volkswagen-owned Traton have been 2.4% decrease.

Citi stated a 25% tariff on vehicles assembled in Mexico would probably have a 700-800 million euro ($818-$934 million) influence on earnings for Daimler Truck, though the group might be capable to soak up round half of that within the close to time period through value will increase. Neither Daimler Truck nor Traton export to the US from Europe as they’ve factories within the U.S. and websites in Mexico which can be coated by the USMCA free commerce pact. Analysts at Bernstein stated it had not been explicitly stated that Trump’s announcement would apply to the USMCA-compliant Mexican websites, however that they assumed it to be the case.

“Lastly, it is also not clear if the industry-specific tariffs will come on prime of the country-based tariffs, though some nations together with the EU have negotiated agreements that forestall tariff ‘stacking’,” the analysts stated.

Volvo Group, which produces all of its U.S. vehicles domestically, stated it welcomed the U.S. administration’s efforts “to eliminate the comparative drawback of manufacturing within the U.S.”. Its shares have been up 3.5%.

Daimler Truck and Traton declined to remark.

($1 = 0.8562 euros)