Shares of Japanese automakers and South Korean battery makers fell on Tuesday after U.S. President Donald Trump hinted at imposing tariffs on Canada and Mexico, while revoking an electric vehicle (EV) executive order from the previous administration.
Honda Motor shares dropped 0.3% to 1,478 yen, reflecting apprehensions over potential tariffs impacting the 80% of its Mexican production exported to the U.S. Mazda Motor saw a sharper decline, with shares down 2%, as the automaker assesses the potential impact on its exports from Guanajuato, Mexico. Conversely, Nissan Motor shares rose 1.2% despite the automaker exporting 300,000 vehicles annually from its Mexican facilities to the U.S.
In South Korea, Hyundai Motor and Kia initially gained as much as 2.2% and 4.3%, respectively, but closed flat and 0.96% lower. Both companies emphasized their commitment to adapting their global production strategies to meet international challenges.
South Korean battery manufacturers were hit hard by Trump’s revocation of a 2021 executive order aimed at increasing EV adoption in the U.S. LG Energy Solution fell 4.3%, while SK Innovation lost 3.7%. The rollback is expected to hamper the progress of Korean suppliers for U.S. automakers like Tesla, General Motors, and Ford.
However, South Korean shipbuilders experienced gains, fueled by Trump’s push to boost liquefied natural gas (LNG) production. HD Hyundai Mipo surged 9.7%, while HD Hyundai Heavy Industries climbed 6%, reflecting optimism about increased demand for transportation vessels.
The volatility underscores growing concerns about Trump’s trade policies, especially among Asian nations heavily reliant on exports. “A slowdown in the U.S. and global economies due to additional tariffs and other measures will worsen the Japanese export environment,” said Takahide Kiuchi, economist at Nomura Research Institute.
With the EV sector facing renewed challenges and trade uncertainty on the rise, Asian automakers and suppliers brace for further turbulence in 2025.
Source: Reuters
