Asian Car and Battery Manufacturers Suffer as Trump Gets to Work

Shares of Japanese automakers and South Korean battery producers fell on Tuesday after US President Donald Trump indicated he may put tariffs on Canada and Mexico shortly and overturned the previous administration's executive order on electric vehicles.

Trump's two actions within hours of his inauguration demonstrate how changes in US policy could impact industrial giants in close US allies Japan and South Korea. Car manufacturers are already facing significant upheaval as a result of the transition to electric vehicles and the meteoric ascent of Chinese competitors.

Trump stated that he was considering slapping 25% tariffs, which could be implemented on February 1. The specter of future tariffs on the two countries has hung over Asia's manufacturing industries for months. Several automakers and their suppliers manufacture vehicles in the two countries and export them to the United States.

Nissan Motor, Japan's third-largest automaker, saw their shares fall 0.3% to 420.9 yen after a morning gain. Nissan has two operations in Mexico, where it manufactures the Sentra, Versa, and Kicks for the US market. Chief Executive Makoto Uchida stated in November that the company ships approximately 300,000 vehicles to the United States each year.

Honda Motor exports 80% of its Mexican output to the United States, and its chief operating officer, Shinji Aoyama, warned in November that if the United States imposed permanent tariffs on imported automobiles, it would have to consider moving production.

Honda shares fell 0.3% to 1,479 yen, reversing earlier gains. They had surged as high as 1,526 yen at the start of trading.

Japanese finance minister Katsunobu Kato said on Tuesday that the government will respond "appropriately" after reviewing the new president's ideas.

South Korean battery producers' shares fell, with LG Energy Solution down 5% and Samsung SDI and SK Innovation down more than 4% each.