Auto stocks slide as Trump threatens even more taxes on Chinese imports
- President Donald Trump asked his administration to draft a new list of $200 billion worth of Chinese imports to tax.
- The potential new tariffs come less than a week after the White House placed them on $50 billion worth of raw materials, machinery, autos, and more.
- Major US automakers fell in early trading Tuesday following the announcement.
Shares of major US automakers fell in early trading Tuesday morning after President Donald Trump asked his administration to draw up a new list of $200 billion worth of Chinese imports to hit with a 10% tax.
Here's how the company's stocks were trading:
- Ford: -1.1%
- General Motors: -1.4%
- Fiat Chrysler: -1.5%
- Tesla: -1.3%
The automakers - whose losses early Tuesday outpaced broader market indices, which indicated a loss of about 1% at the opening bell - depend heavily on imported raw materials that were already included in last week's list of newly taxed imports on $50 billion worth of goods at a rate of 25% beginning July 6. Automobiles and industrial machinery were also included.
China remains the largest vehicle market in the world, with US companies exporting $10.2 billion worth of passenger cars to the country in 2017, according to Census data. Any fresh retaliation and resulting escalation of a trade war could dampen sales of American vehicles in the country.
China has already placed reciprocal tariffs on the same amount of goods imported from the US and promised to stand firm against the US's actions.
"This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods. This is unacceptable," Trump said late Monday. "Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States."