Wall Street pointed lower in premarket trading Thursday after President Donald Trump announced he will slap 25% tariffs on imported cars.
Futures for the S&P 500 were down 0.2% before the bell Thursday, while futures for the Dow Jones Industrial Average were flat. Nasdaq futures dipped 0.4%.
Trump on Wednesday said he was raising duties on auto imports to encourage more production to relocate to the U.S. But the impact will be complicated since U.S. automakers and foreign manufacturers have plants around the world to accommodate global sales while maintaining competitive prices — and it could take years for companies to design, build and open the new factories that Trump is promising.
In premarket trading early Thursday, General Motors Co.’s shares sank 6.8%, while Ford Motor Co. narrowed its losses to less than 1% after being down more than 3% overnight.
In other premarket trading, Petco jumped 9% after the pet store chain beat analysts’ fourth-quarter sales and profit projections. Investors bought up the retailer’s shares even as the company projected another sales decline this year.
In Europe at midday, France’s CAC 40 declined 0.3%, while Germany’s DAX fell 0.8% and Britain’s FTSE 100 dipped 0.6%.
In Asian trading, Japan’s benchmark Nikkei 225 lost 0.6% to finish at 37,799.97. Shares of automakers took big hits.
Toyota Motor Corp.’s stock fell 2%, while Honda Motor Co. stock dipped 2.5%. Nissan was down 1.7%. Mazda Motor Corp.’s shares dropped 6%, while Subaru’s lost nearly 5%. Mitsubishi Motors Corp. lost 3.2%.
Japanese Prime Minister Shigeru Ishiba has sought to persuade Trump to exempt Japan from the higher tariffs, and he reiterated his position Thursday.
”We strongly request that tariff measures not be applied to Japan,” he told reporters.
South Korea’s Kospi fell 1.4% to 2,607.15. Korean automakers also felt a chill from Trump’s announcement. Hyundai Motor Co.’s shares traded in Seoul lost 4.3% while Kia Corp.’s shares dropped 3.5%.
Shares in Greater China, apart from Taiwan, were higher. Hong Kong’s Hang Seng gained 0.4% to 23,578.80, while the Shanghai Composite index was up 0.2% at 3,373.75.
Chinese automakers and parts manufacturers have been expanding sales around the world, but not in the United States, so any impact from the tariffs announcement would be an indirect one.
But Taiwan’s benchmark, the Taiex, sank 1.4%. In Australia, the S&P/ASX 200 dropped 0.4% to 7,969.00.
Trade tensions are likely to heighten in coming weeks, analysts said.
“Higher trade barriers may disrupt supply chains and slow growth. Auto, metals, pharma and technology face a direct hit from U.S. tariffs,” said Eunice Tan, head of Asia-Pacific credit research at S&P Global Ratings.
“Fears of a sharper global downturn could hit demand and confidence, squeezing the region’s downstream and consumer discretionary sectors.”
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AP Videographer Ayaka McGill contributed.
