Investing.com-- Japanese automaker shares tumbled on Monday following U.S. President Donald Trump's imposition of tariffs on imports from Mexico, Canada, and China, intensifying concerns over supply chain disruptions and increased costs.
The tariffs, effective from Tuesday, impose a 25% duty on imports from Mexico and Canada, and a 10% duty on Chinese goods. Analysts warn that these measures could lead to higher vehicle prices in the U.S. market and potential retaliatory actions from affected countries.
Toyota (NYSE:TM) Motor (TYO:7203) shares declined 5.5% as of 04:59 GMT on Monday, while Nissan (OTC:NSANY) Motor (TYO:7201) stock slumped 6.4%.
Honda (NYSE:HMC) Motor Co (TYO:7267) shares plunged nearly 7%, while Mazda Motor (OTC:MZDAY) Corp (TYO:7261) shares experienced an even sharper drop of 7.4%.
These companies have significant manufacturing operations in Mexico, making them particularly vulnerable to the new tariffs.
"Among Japanese automakers, Mazda and Nissan rely on imports from Mexico for about 30% of their U.S. sales, while Honda depends on Canadian imports for a similar proportion. Therefore, the 25% additional tariff will have a relatively large impact on them," J.P. Morgan analysts said in a note.
Toyota and Honda have relatively lower exposure, each exporting less than 10% of their Mexico-produced vehicles to the American market.
The broader Nikkei 225 index also felt the impact, dropping nearly 3% as investors grappled with the potential economic fallout from escalating trade tensions.
In response to the U.S. tariffs, Canada announced retaliatory measures on $105 billion worth of American goods. Mexico is expected to unveil its own countermeasures soon, further complicating the trade landscape for automakers.