Biden lifts China car tariffs: will Brussels follow suit?
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US LIFTS CHINA CAR TARIFFS: WILL BRUSSELS FOLLOW SUIT?
Trade wars are heating up again.
U.S. President Joe Biden just unveiled a bundle of steep tariff increases on an array of Chinese imports.
As expected, cars are included with tariffs on electric vehicles from China going to rise to 100% in 2024 from 25%.
Now the big question for investors in European autos is what Brussels does next as a result of its invesitagion over Chinese subsidies to local car makers. In any case, it's going to be a tough decision and markets should brace for a bumpy ride.
"In a scenario of potential tariffs war RNO (Renault) and STLA (Stellantis) which have limited exposure to China would likely be less impacted compared to the German car makers," writes Mediobanca Securities.
"Having said that, the introduction of tariffs would add a lot of volatility to the car sector also due to the eventual uncertainty related to the supply chain that might suffer from some retaliation as well," it adds.
Players such as Volkswagen, Mercedes, BMW and Porsche have most at stake. They would risk to be impacted by a potential retaliation on their export to China, Mediobanca recalls.
As the higher US tariffs were announced, a gauge of European auto stocks .SXAP showed little reaction. It was last up 1.2% on the day. Tesla's Frankfurt-listed stock TSLA.F also barely moved.
(Danilo Masoni)
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