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Musk Hit by Trump's Backstab "Became the Biggest Victim of the Tariff War"

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Korea Economic Daily
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  • After President Trump's tariff announcement, it was reported that the stock prices of American companies like Tesla and Apple plummeted.
  • Tesla was identified as the biggest victim of the tariff war due to its reliance on Mexican parts and revenue from the Chinese market.
  • Apple couldn't avoid a stock price drop despite diversifying its supply chain, as it still heavily relies on Chinese parts.
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  • The article was summarized using an artificial intelligence-based language model.
  • Due to the nature of the technology, key content in the text may be excluded or different from the facts.

Trump's Tariff War Becomes a 'Boomerang' for the US Stock Market

Tesla Drops 5%, Apple 3% on First Trading Day After Tariff Announcement

In Canada, Calls for "100% Tariff on Tesla" as Retaliation

Apple Expands Supply Chain but Still Relies Heavily on Chinese Imports

American companies like Tesla and Apple faced a 'tariff boomerang' as their stock prices plummeted on the 3rd (local time).

On this day, Tesla closed at $383.68, down 5.17%, and Apple ended at $228.01, down 3.39% on the New York Stock Exchange. The S&P 500 index fell 0.8%, and the tech-heavy Nasdaq Composite Index dropped 1.2%.

The US stock market started with a sharp decline on the first trading day after President Donald Trump announced a 25% tariff on Canada and Mexico and a 10% tariff on China.

The automotive industry, with a high production ratio in Mexico and Canada, was hit hard. General Motors (GM) stock fell nearly 9% as trading began. However, as the US and Mexico announced a one-month tariff delay, it recovered some losses, closing down 3.15% at $47.9. Ford fell 3.8% at one point but recovered about half.

Tesla, which produces all its North American sales in the US, was also affected by the tariffs. According to CNBC, Tesla imports about 15% of the parts for its US-sold Model Y from Mexico.

Concerns about retaliation against Elon Musk, the CEO of Tesla, who has become a symbol of the Trump administration, also contributed to the stock price decline. Chris Freeland, a former finance minister and candidate for the next Canadian prime minister, argued in a local media interview last month that "a 100% tariff should be imposed on Tesla vehicles." Doug Ford, the Premier of Ontario, Canada, announced on the 3rd that he would cancel contracts with Musk's SpaceX and Starlink.

Tesla's inclusion as a company expected to be affected by the trade war with China also impacted its stock price decline. Forbes emphasized that Tesla earned 21% of its revenue from China last year, pointing out that "Musk is the biggest victim of the tariff war so far."

Apple also couldn't avoid a stock price drop due to concerns about tariffs on Chinese-made parts. Excluding Tesla, it had the largest decline among US big tech companies. CNBC evaluated that although Apple has expanded its supply chain to Vietnam, Malaysia, and India, it still relies heavily on Chinese parts, showing "how vulnerable Apple can be to increased import costs."

Reporter Kim In-yeop inside@hakyung.com

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