Shares of Japanese automakers and South Korean battery manufacturers fell on 21-01-2025 following U.S. President Donald Trump’s statement that he could soon impose a 25% tariff on Canada and Mexico, along with his decision to revoke the previous administration’s executive order on electric vehicles. However, Chinese manufacturers saw a different outcome, with stocks rising after Trump did not mention China in his inauguration speech or impose tariffs on Beijing as he had previously pledged.
The sharp fluctuations in Asian shares just hours after Trump’s inauguration underscore how his policy shifts could pressure major manufacturers in some of Washington’s closest regional allies, Japan and South Korea. Automakers in both countries, along with their suppliers, are already grappling with disruption from the transition to electric vehicles and growing competition from rapidly advancing Chinese rivals.
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Trump indicated that he was considering imposing 25% tariffs on Canada and Mexico, with the action potentially taking effect on February 1. The threat of such tariffs has been a concern for Asian manufacturers, especially since Mexico has long served as a cost-effective manufacturing hub for automakers, including major Asian companies.
According to Takahide Kiuchi, executive economist at Nomura Research Institute, “President Trump will remain unwavering in his intention to continue to implement across-the-board additional tariffs as both a way to resolve issues with other countries and as a means of reducing the U.S. trade deficit.”
Shares of Nissan Motor (7201.T), Japan’s third-largest automaker, gave up most of their morning gains and ended flat at 423.9 yen after reaching a high of 437.8 yen earlier in the session. Nissan operates two plants in Mexico, manufacturing the Sentra, Versa, and Kicks models for the U.S. market. CEO Makoto Uchida says the company exports approximately 300,000 vehicles to the U.S. annually.
