Duties, the big three of cars collapse in Wall Street (and Walmart invests six billion in Mexico)

Deep red for the titles of the big three of the automotive sector
US after thePresident Donald Trump of Dice of 25% on imports on imports in the USA of cars and foreign components. General Motors, Ford and Stellantis (Chrysler and Jeep) lose 6.6%respectively, 3.1%and 2.9%. The car manufacturers outside the United States also collapsed. In Tokyo, Honda Motor it dropped by 2.5% and Toyota Motor He lost 2%. In Seoul, Hyundai Motor lost 4.3%. Electric vehicles manufacturers Tesla and Rivian instead they resisted better. Elon Musk’s Tesla rose by 2.7%, while Riveian gained 3.1%.

Ford and GM the most at risk houses

According to Bernstein’s analysts, Ford and GM would be the two companies to suffer the worst backlash from the duties, with the operational profit that could decrease by 30% already this year, despite an increase in prices and differentiate the sources of supply. Better for Stellantissince the assembled jeeps in Mexico have a higher percentage of US components. Instead, the Ferrari route reverses in Milan and Wall Street (+1%). The house of Maranello, based on preliminary information
currently available relating to the introduction of duties on imports
of EU cars in the USA, announced that will update the
their commercial policy and the prices of some models will be raised by 10%. Also according to Bernstein analysts, Ferrari will be able to support the impact of the rates thanks to a faithful clientele that will not be discouraged by higher prices.

Walmart invests in Mexico

But the reactions to Trump’s announcement do not only directly concern the car sector. The commercial war unleashed by the American president pushed Walmartthe US multinational owner of the homonymous chain of retail shops and perhaps one of the most powerful symbols of stars and stripes capitalism, to invest 6 billion dollars in Mexico this year. Since the duties promised on imports from Mexico will see Walmart among the companies that will undergo the heaviest repercussions, the chain of shops has decided to invest beyond the border via Walmex, the Mexican and Central American division of Walmart herself. Apparently, focusing on the weakest branch of the American giant in the most fragile economy than the stars and stripes, it might seem a gamble, but as he had also written The Economist A few weeks ago, the « America First could prove to be a manna for the Mexican activities of Walmart ». In many respects, Walmex seems less exposed to Trump’s policies than Walmart. In terms of value, only 17% of what Walmex sells in Mexico comes from abroad. Walmart’s share in America is double.

The hopes of the markets

Meanwhile, the markets continue to hope that that that Trump defined as « day of liberation »that is to say April 2ndopts for more targeted or less painful rates than kept for the global economy. Even if it did, however, all this talk about rates has already made US consumers and companies more cautious and pessimistic. If this mood convinced them to reduce the expenses, the economy could be affected.