Trump tariffs impact: Tata Motors shares plunge 6% as 25% tariff on auto imports to US announced

Trump auto tariffs impact: Tata Motors shares declined 6.31% to Rs 663 during early trading hours on Thursday, following the announcement by US President Donald Trump regarding implementation of 25% tariff on imported cars and light trucks starting next week.
The United States of America is a significant market for Jaguar Land Rover, contributing 22% of total sales according to JLR's annual report for the 2024 financial year.
At 10:54 AM, Tata Motors shares were trading at Rs 675.65, down Rs 32 or 4.56% on the Bombay Stock Exchange. Tata Motors' stock has experienced a decline of 28.18% and lagged behind its sector's performance by 33.35% during the previous year. However, investors who held the stock for three years benefited from a substantial return of 63.91%, according to an ET report.
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During a management conference, company executives provided assurance to investors regarding JLR's FY25 EBIT targets. The Chief Financial Officer validated the company's trajectory towards achieving the FY25 EBIT margin target of minimum 8.5%, whilst highlighting that JLR's volume performance in FY26 could be affected due to Jaguar models being discontinued.
According to the ET report, the company indicated that potential U.S. tariffs on European imports might necessitate price adjustments and efficiency measures to offset the impact. While Trump plans to implement retaliatory tariffs on April 2, the U.S. administration has indicated selective enforcement. However, specific details about exempted countries or sectors remain unclear.
This decision by Donald Trump intensifies international trade tensions following his return to the White House this year. Industry analysts suggest this development will lead to increased prices and supply chain disruptions in the automotive sector.
“We're going to impose a 25% tariff on all cars not made in the United States,” Trump stated during an event in the Oval Office.
Trump considers tariffs as a revenue source to balance his promised tax reductions and strengthen the U.S. industrial sector. He confirmed the tariffs would begin on April 3, following his planned announcement of reciprocal tariffs targeting nations with the largest contributions to the U.S. trade deficit.