On January 21st, European carmakers experienced a significant drop in their stock value as concerns about potential new tariffs under the new U.S. President, Donald Trump, emerged. Despite Trump's initial hesitance, mentioning possible tariffs by February 1st related to immigration issues and drug trafficking, uncertainty loomed.

Companies like Stellantis and Volkswagen, with manufacturing facilities in Mexico for the American market, were particularly affected. Stellantis shares fell about 2% by 0813 GMT, with the wider European automotive sector also declining by approximately 1%.

Notably, German automakers such as Volkswagen, BMW, and Mercedes saw their shares decrease by 1.2% to 1.6%. Furthermore, Spanish bank BBVA, heavily invested in Mexico, suffered a 1.6% stock drop in Madrid following the depreciation of the Mexican peso against the dollar.

Regarding U.S. trade policy, Trump hinted at potential tariffs but acknowledged the reluctance in taking that step just yet. A Volkswagen spokesperson expressed concerns about the impact of proposed U.S. tariffs on consumers and the automotive industry.