TOKYO/MILAN, May 31 (Reuters) - Shares of global automakers and suppliers tumbled on Friday after U.S. President Donald Trump threatened to impose tariffs on imports from Mexico, potentially upending a global manufacturing business model established decades ago. From Mazda in Japan to Volkswagen in Germany to General Motors in the United States, carmaker stocks took a hit as a new front opened in the global trade war. Trump said in a Tweet on Friday. For years carmakers have built vehicles in Mexico, taking advantage of its cheap labour, trade deals and proximity to the United States, the world's largest auto market after China. The move could hit a number of global companies, with the auto industry looking particularly vulnerable, along with aerospace suppliers, industrial component makers and electronics firms. Jon Harrison, a senior macro strategist at TS Lombard. 32.5 billion in auto parts flowed to the U.S. Mexican factories, according to U.S.
The American Automotive Policy Council, which represents U.S. Washington D.C., said new tariffs would ruin the benefits of Trump's proposed new trade agreement with Mexico and Canada, which relies on duty-free access. Some of the most popular vehicles sold in the United States are made in Mexico, including versions of General Motors' Chevrolet Silverado pickup, the Chevrolet Blazer SUV, Volkswagen's Jetta sedan and the Toyota Tacoma pickup. The move also looks also likely to backfire on U.S. Janet Lewis, an analyst at Macquarie Securities. Swedish industrial seals and bearings maker SKF, which supplies carmakers in the United States from Mexico, said it would pass on any tariff impact to customers. In Japan, shares in Toyota fell 3% while Nissan dropped 5% and Honda 4%. Mazda took a bigger hit, tumbling 7%. All four operate vehicle assembly plants in Mexico, producing roughly one-third of the vehicles made there. In Europe, potential merger candidates Fiat Chrysler and Renault led the carmakers lower, each falling 5%, while automotive supplier Faurecia was down 4% in late afternoon trading. Shares in Madrid-listed bank BBVA and Italian steel pipe maker Tenaris, both with significant exposure to Mexico, each fell 4%, while Mexican-focused exchange-traded funds reeled.
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