European auto shares rally after US-Japan trade deal
Shares in Japanese and South Korean automakers surged overnight on news the deal would cut the U.S. tariff on Japanese vehicle imports to 15 per cent, from a proposed 25 per cent.
Volvo Car jumped around 7 per cent to its highest since mid-May. Germany's Porsche , BMW, Mercedes Benz, Volkswagen all rose between 3.8 per cent and 6.8 per cent. Shares in Stellantis and Renault were up around 3 per cent.
The European auto stocks index rose 3.4 per cent by 0706 GMT, the most among other sectoral indices, compared with a 0.9 per cent rise in the regional STOXX 600 index.
The European Commission is seeking to reach a trade deal outline with the United States ahead of the August 1 deadline set by U.S. President Donald Trump for broad tariff increases.
As part of these efforts, Brussels is discussing with U.S. counterparts a range of measures aimed at protecting the European Union auto industry, including tariff cuts, import quotas and credits against the value of EU automakers' U.S. exports, industry sources and trade officials say.
Citi analysts said it was notable the tariffs for a major auto exporting country were reduced without a cap on shipments, which could have implications for negotiations with the EU and South Korea.
Europe shipped nearly 758,000 cars worth 38.9 billion euros ($45.57 billion) to the U.S. in 2024, more than four times as many as in the other direction, according to data from European auto association ACEA.
However, a group representing U.S. automakers that includes Chrysler-parent Stellantis signalled their unhappiness with the deal, raising concerns about a trade regime that cuts tariffs on auto imports from Japan, while leaving tariffs on imports from their plants and suppliers in Canada and Mexico at 25 per cent.
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