Published by Global Banking & Finance Review®
Posted on January 21, 2025
4 min readLast updated: January 27, 2026
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Asian automakers and battery makers face challenges with Trump's tariff plans, impacting Japanese and South Korean industries, while Chinese stocks rise.
By Hyunjoo Jin and Daniel Leussink
TOKYO/SEOUL (Reuters) - Shares of Japanese automakers and South Korean battery makers fell on Tuesday, after U.S. President Donald Trump said he could impose tariffs on Canada and Mexico soon and revoked the previous administration's executive order on electric vehicles.
But Chinese manufacturers bucked the trend, with stocks opening higher after Trump did not target China in his inauguration speech or immediately impose tariffs on Beijing as previously promised.
Shares of South Korean shipbuilders rallied with the expectation that Trump's plans to increase gas and oil production would spur demand for transportation vessels.
The volatility in Asian shares following Trump's inauguration underscores how policy changes under Trump could affect major manufacturers in some of Washington's closest allies in the region, such as Japan and South Korea. These countries' automakers and suppliers are already grappling with the transition to EVs and intense competition from fast-rising Chinese rivals.
Trump indicated potential 25% tariffs on Canada and Mexico, potentially starting on Feb. 1. This threat looms over Asian manufacturers as Trump aims to reduce the U.S. trade deficit.
Mexico in particular has long been a low-cost manufacturing hub for automakers, including Asian heavyweights.
Shares of Honda Motor, Japan's second-biggest automaker, ended down 0.3% at 1,478 yen after giving up early gains.
Honda sends 80% of its Mexican output to the U.S. market, and its chief operating officer Shinji Aoyama warned in November it would have to think about shifting production if the U.S. were to impose permanent tariffs on imported vehicles.
Shares of Mazda Motor, which exported about 60% of around 209,000 vehicles produced at its plant in Guanajuato, Mexico, to the U.S. in 2024, ended down 2.0% after Trump's comments.
Mazda will assess what impact potential duties would have on imports from Canada and Mexico, a company spokesperson said.
'GREAT CONCERN'
Shares of Nissan Motor recovered from mid-morning losses to end 1.2% higher, bucking the downtrend.
Nissan has two plants in Mexico, where it makes the Sentra, Versa and Kicks models for the U.S. market. It exports about 300,000 vehicles to the U.S. a year, Chief Executive Makoto Uchida said in November.
The Trump administration's economic policies are of great concern to major countries in Asia, which rely on exports for their economic growth.
"A slowdown in the U.S. and global economies due to additional tariffs and other measures will worsen the Japanese export environment," Takahide Kiuchi, executive economist at Nomura Research Institute, said in a note to clients, comments that could likely be applied to other countries in the region.
South Korea's Hyundai Motor and sister automaker Kia which produce vehicles in Mexico, pared early gains of as much as 2.2% and 4.3%, respectively. They closed flat and down 0.96%, respectively.
The South Korean duo said in a statement its production there was part of its long-term, global strategy, adding it was committed to adapting operations to the international environment.
BATTERY MAKERS, SHIPBUILDERS MIXED
Shares of South Korean battery makers dropped, with LG Energy Solution falling 4.3%, while SK Innovation lost 3.7%.
Trump revoked a 2021 executive order signed by his predecessor, Joe Biden, that sought to ensure half of all new vehicles sold in the United States by 2030 were electric.
The move is expected to deal a blow to Korean battery suppliers for Tesla, General Motors, Ford and other major automakers, which have been building new battery factories in the United States to benefit from the previous administration's subsidies.
Trump issued an order on Monday for the U.S. to resume processing export permit applications for new liquefied natural gas (LNG) projects, part of an effort to dismantle his predecessor's climate policies.
Trump previously said the United States' shipbuilding industry is in need of South Korea's support.
South Korea's shipbuilding sector rallied. HD Hyundai Mipo soared 9.7%, while HD Hyundai Heavy Industries rose 6%.
(Reporting by Hyunjoo Jin, Daniel Leussink, Jihoon Lee and Brenda Goh; Writing by David Dolan; Editing by Gerry Doyle and Jacqueline Wong)
The article discusses the impact of Trump's tariff plans on Asian car and battery makers.
Chinese manufacturers saw stock gains as Trump did not target China in his policies.
South Korean shipbuilders benefit from Trump's plans to increase oil production.
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