Milan-listed Shares of Jeep and Dodge owner Stellantis were 5% lower Tuesday afternoon as trade tensions between the U.S. and Canada escalated.
European stock markets were broadly in the red and extended losses after Trump said he would raise tariffs on Canadian steel and aluminum imports by an additional 25%, bringing the total duties to 50%. The new measures come into effect from Wednesday.
It comes after Ontario’s government issued a 25% tax on electricity exports to the U.S.
Stellantis and other automakers which sell to the U.S. and have major production operations in the countries targeted by tariffs, including Volkswagen, are currently benefiting from a temporary tariff reprieve if their goods comply with the United States-Mexico-Canada Agreement (USMCA.)
However, the likes of Stellantis — which has several manufacturing facilities in Canada — could be hit hard by the Tuesday escalation.
Trump posted on his Truth Social media platform that “if other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!”
Elsewhere in European markets, the Stoxx Europe 600 Travel & Leisure index dropped 3%, with shares of British Airways owner International Airlines Group down by 5.2%. The company on Monday announced the launch of a corporate investment arm that will funnel up to 200 million euros ($218 million) into “high-potential companies shaping the future of aviation.”
Healthcare stocks were also in negative territory, after Danish pharmaceutical giant Novo Nordisk’s latest weight loss drug trial results. The pharma giant was down 2%, while Swiss pharma company Novartis shed 3.8%.
Volkswagen reported a 15% year-on-year drop in annual operating profit on Tuesday, citing an increase in costs and “extraordinary expenses” in regards to its restructuring plans. The company’s shares were last seen trading around 2% higher.
