Speed breaker ahead for auto industry as US mulls tariffs on imported vehicles

The global trade war has already left a negative footprint in the economy and dented the benchmark indices, but the story is not finished yet as the US is now imposing tariffs on imported cars and trucks, which can create trade tensions and shake up the global auto industry. 

The US President Donald Trump has launched national security investigations on auto imports, assuming that it may be a threat to its national security. 

The US may impose additional tariff of 25% on imported vehicles, as it has previously imposed tariff on imported steel and aluminium.

India is ninth in the list of the US trading partners that have a trade surplus, which means that India exports more to the US than it imports from that country. 

India’s automobile exports, in proportion to the total production, remained stagnant last year owing to a dip in shipments of cars and commercial vehicles. However, if the proposed tariffs on imported vehicles remain for the long term, Indian auto market will definitely feel the heat. 

The news led to auto index declining by 1.65% due to the fall in the stock prices of auto majors such as Tata Motors (-6.56%), Motherson Sumi (-4.95%) and Bharat Forge (-6.02%) in Thursday's trading session.