If you thought Monday mornings were rough, try being a Japanese or South Korean automaker today. Shares of major car manufacturers across Asia nosedived after U.S. President Donald Trump rolled out sweeping tariffs on imports from Mexico, Canada, and China, hitting exporters where it hurts, their bottom line.
Though the move was widely expected, it still sent shockwaves through global markets, leaving investors grappling with fears of weakened demand from the world’s largest economy. More concerning? The growing threat of a global economic slowdown. Talk about a case of the Mondays.
Automakers in the Crosshairs
Among the hardest hit were Japanese and South Korean automakers, many of whom have manufacturing operations in Mexico to supply the U.S. market.
Toyota (7203.T) and Nissan (7201.T) took a dive of over 5%.
Honda (7267.T) took it even worse, tumbling more than 7%.
Kia Motors (000270.KS) skidded nearly 7%, proving that even the South Korean car giant wasn’t immune to tariff turbulence.
Nissan’s Mexican plants churn out around 300,000 vehicles annually for the U.S., while Honda ships a whopping 80% of its Mexican output north of the border. Honda’s Chief Operating Officer Shinji Aoyama previously hinted that if tariffs became a long-term fixture, they might have to rethink their production strategy. After today’s market reaction, that ‘rethinking’ might be happening a lot sooner than expected.
Not Just Cars, Batteries, Tech, and Iron Ore Get Slammed
It’s not just automakers licking their wounds. South Korean EV battery giants like POSCO Future M (003670.KS) and EcoPro BM (247540.KQ) saw their shares drop 9.1% and 8.7% respectively, as their plans to supply GM and Ford from Canadian factories hit a tariff-shaped roadblock.
Meanwhile, Taiwanese tech manufacturers with Mexican factories weren’t spared either:
Foxconn (2317.TW) fell 8%
Quanta (2382.TW) plummeted 10%
Inventec (2356.TW) dropped 8%
Australia’s iron ore miners, including BHP, Rio Tinto, and Fortescue, also took a hit, declining between 2-5% as investors feared that trade disruptions would slow down global demand for raw materials.
Trade War or Just a Tough Negotiation Tactic?
Trump’s latest move comes with a hefty price tag—25% tariffs on Mexican and Canadian imports and 10% on goods from China. Mexico and Canada didn’t take this lying down, with Canadian PM Justin Trudeau swiftly announcing retaliatory tariffs on $155 billion worth of U.S. goods. So, is this the start of another bruising trade war, or just part of Trump’s high-stakes deal-making strategy?
Personal Opinion: Tariffs, Are They Tough Love or An Economic Gut Punch?
On one hand, tariffs are supposed to protect domestic industries and encourage local manufacturing. The idea is simple: make foreign products more expensive, and U.S. companies gain an edge. In theory, this could help bring jobs back home.
On the flip side, retaliatory tariffs and disrupted supply chains often mean that the pain trickles down to consumers. Higher costs for manufacturers usually translate to higher prices for everyday people. So, while some might call this a necessary evil for economic self-sufficiency, others see it as an unnecessary self-inflicted wound in an already fragile global economy.
Either way, for Asian automakers and their investors, this Monday feels less like the start of a productive workweek and more like the morning after a particularly bad night out.
Photo: Wired
