Germany’s automotive sector could fall as much as 12% over “three bad trading days,” if President Donald Trump imposes tariffs on European car manufacturers, one analyst told CNBC.
Trump has until Friday midnight (Washington time) to decide whether to impose duties on car imports. This would likely hurt Germany, the EU’s traditional growth engine, given that it is one of the largest direct car exporters to the U.S.
The German stock market could fall as much as 6% and its automobile and components sector, specifically, could see losses of up to 12%, according to Christoph Schon, executive director of Axioma, a risk management solutions provider. He told CNBC over the phone that the losses could happen over a period of three trading days, or over five to 10 sessions.
Germany’s DAX is up by about 14% so far this year, while the overall European auto sector is higher by about 11% this year. Volkswagen and Daimler are up by around 7% and 15%, respectively.
Trump threatened to impose 20% tariffs on European cars back in 2018, arguing there’s a trade imbalance threatening the U.S.’s national security. The EU is the largest exporter of motor vehicles in the world, whereas the United States is the largest importer.
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