Automakers plunge as China plots retaliatory tariffs on US products

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Markets Insider

General Motors stock price

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Markets Insider

The shares of major automakers dropped in pre-market trading on Wednesday following China’s remarks that it will respond in-kind to President Donald Trump’s proposed tariffs on $50 billion worth of Chinese products.

The Detroit big-three – Ford, General Motors, and Fiat Chrysler – were down 3.05% at $10.81 a share, 4.49% at $35.28 a share and 3.21% at $21.09 a share respectively on news that automobiles would be among the targets of China’s proposed tariffs.

China’s government plans to slap a 25% tariff on automobiles, soybeans and chemicals, according to reports by Bloomberg. All told, the retaliatory response would be the equivalent of $50 billion worth of tariffs on more than 100 different American products.

The country’s leaders said it would “soon take measures of equal intensity and scale against US goods.”

China’s response comes less than 24 hours after the US announced an initial list of the products that will be subject to roughly $50 billion in new tariffs. The list would impose tariffs on raw materials, construction machinery, agricultural equipment, electronics, medical devices, and consumer goods in China.

Trump had started the trade tiff after he announced he would impose tariffs on steel and aluminum outside the US. However, trade groups like the American International Automobile Dealers Association warned against the move, saying it would make cars more expensive.

“These proposed tariffs on steel and aluminum imports couldn’t come at a worse time,” Cody Lusk, CEO of the American International Automobile Dealers Association, said in a statement on Thursday.

“Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America.”

Read more about China’s retailiatory tariffs’ effect on soybeans in the US.

Ford stock price

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Markets Insider

Fiat Chrysler stock price

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Markets Insider