German Automakers Drag European Markets After U.S. Announced 25% Tariffs

Bridgette Randall
27 Mar, 2025
London

European markets eased sharply after the U.S. announced a new set of tariffs targeting global automobile makers, and the euro edged lower. 

Benchmark indexes in Frankfurt and Paris dropped more than 1% after transatlantic tensions rose following the announcement of a new round of tariffs. 

The Trump administration slapped a 25% import tax, which will be paid by American consumers, on automobile and automotive parts imports from Asia and Europe. 

The White House falsely hopes that the additional tariffs will alter supply chains and convince foreign automakers to set up plants in the U.S. 

The move is likely to backfire, as automakers will pass on higher prices to consumers, which will also contribute to inflation and slow down economic growth. 

The European Union said it will defend its interests, but the region is open to discussion with the U.S. to find a solution.  

"It must be clear that we will not give in to the US. We need to show strength and self-confidence," said Germany's Vice Chancellor and Economy Minister Robert Habeck on Thursday.

 

Europe Indexes and Yields

The DAX index decreased by 1.5% to 22,503.87, the CAC-40 index edged lower 1% to 7,950.04, and the FTSE 100 index declined by 0.6% to 8,637.70.

The yield on 10-year German bonds inched lower to 2.75%, French bonds decreased to 3.45%, the UK gilts moved down to 4.72%, and Italian bonds edged lower to 3.86%.

The euro increased to $1.08; the British pound was higher at $1.29; and the U.S. dollar was higher and traded at 88.40 Swiss cents.

Brent crude decreased $0.23 to $73.56 a barrel, and the Dutch TTF natural gas was higher by €0.24 to €41.01 per MWh.

 

Europe Stock Movers

Automakers fell sharply for the second consecutive day in a row following the announcement of steep tariffs by the Trump administration. 

Volkswagen AG decreased 2% to €98.82, Mercedes Benz Group declined 3.6% to €55.94, BMW fell 2.2% to €77.56, and Stellantis NV eased 2.4% to $11.65.

Symrise AG advanced 0.5% to €90.40, and the fragrance company reiterated its outlook and raised its dividend. 

Alcon AG jumped 4.5% to CHF 84.02, and the eyecare company agreed to acquire a majority stake in Aurion Biotech to accelerate its Phase 3 development in the U.S. 

The U.S. Food and Drug Administration designated the company's lead asset as a Breakthrough Therapy Designation and Regenerative Medicine Advanced Therapy Designation.