Stellantis, Volkswagen and Volvo Most at Tariff Risk, Moody's SaysStellantis, Volkswagen and Volvo Most at Tariff Risk, Moody's Says

Ratings agency Moody’s says European automakers including Stellantis, Volkswagen and Volvo are the most at risk from possible U.S. tariffs being touted by President Donald Trump.

The agency’s latest analysis suggests proposed tariffs could significantly affect the European automakers who rely on North American markets for production and sales, EV Magazine reports.

Tariffs would threaten the highly integrated supply chains that European automakers have developed in North America over the years and the most exposed to risk are Stellantis, Volkswagen and Volvo.

These companies operate major manufacturing plants in Mexico, where Trump has proposed 25% tariffs, leaving them facing the prospect of a wholesale relocation of facilities into the U.S. with much higher production and labor costs.

This would be a further squeeze on the companies’ bottom line at a time when they are under growing competition in their domestic markets from cheap Chinese imports while also having to buy credits from battery-electric-vehicle makers for failing to meet tightening European Union zero-emission vehicle sales targets.

However, the situation is still very fluid and Goldman Sachs tells its clients that the chances of a 25% Trump tariff on Mexico and Canada are relatively low, about one-in-five.

The European Automobile Manufacturers Assn. (ACEA) is strongly opposed to the prospect of tariffs and their resulting harm to trade.

Its president, Ola Källenius, has called for a “grand bargain” between the EU and the U.S. to avoid a trade war that could severely disrupt car manufacturing and exports.