European Truck Shares Mixed After Trump's Tariff Plan

By Dominic Chopping

STOCKHOLM--Shares in European truckmakers were mixed in early trade Friday, reflecting their potentially diverging fortunes from President Trump's proposed 25% tariff on heavy trucks.

Volvo shares rose 3.3% in Stockholm, while shares in Frankfurt-listed Daimler Truck and Traton fell 2.4% and 1.9%, respectively.

Trump announced a 25% tariff on all big trucks imported to the U.S. from Wednesday. Further details on whether the duties will apply to Mexico-made trucks that are compliant with the United States-Mexico-Canada Agreement, or USMCA, and whether they will be stacked on top of country-based tariffs weren't disclosed.

"Our Great Large Truck Company Manufacturers, such as Peterbilt, Kenworth, Freightliner, Mack Trucks, and others, will be protected from the onslaught of outside interruptions," Trump said in a Truth Social post.

Analysts at Bernstein said that ahead of the announcement there was a significant advantage to manufacturing in Mexico rather than the U.S. Labor costs and other manufacturing costs are cheaper and Mexican-produced trucks typically use powertrains imported from the U.S., which were mostly not subject to any tariffs on entering the U.S. as they were USMCA complaint.

At the same time, some U.S. truck manufacturers faced tariffs on steel and aluminum, Bernstein added.

This previous setup favored Daimler Truck and Traton, who built 72% and 98%, respectively, of their heavy-duty U.S. trucks in Mexico, but punished Paccar that builds 95% of its U.S. trucks in-country and Volvo which builds all of its U.S. trucks domestically, Bernstein said.

Swedish truckmaker Volvo said although few details are available, it understands the administration's motivation.

"An unintended consequence of the current environment is that trucks built in the U.S. have actually been disadvantaged compared to trucks built in Mexico," a spokesperson said.

Volvo produces all of its trucks for sale in the U.S.--under its Volvo and Mack brands--across production sites in Virginia and Pennsylvania. It is currently building a factory to supply North American operations in Mexico.

German manufacturer Daimler Truck, which owns U.S. brands Freightliner and Western Star, could suffer the most from a tariff on trucks given its current production footprint and overall exposure to the U.S. at group level, Bernstein said.

Daimler has two truck manufacturing plants in Mexico producing vehicles under its Freightliner brand, but also has some Freightliner and Western Star production in the U.S.

Analysts at Citi estimate that a 25% tariff on trucks assembled in Mexico for U.S. delivery could mean a 700 million to 800 million-euro ($816.6 million-$933.2 million) earnings hit to Daimler Trucks. Though some of this could be offset through shifting capacity, raising prices and increasing automation.

"We are closely monitoring the situation, but it's too early to provide a detailed comment," a Daimler Truck spokesperson said.

German manufacturer Traton, which is owned by Volkswagen and produces U.S. trucks under the International brand, has manufacturing factories in the U.S. and an assembly plant in Mexico.

A Traton spokesperson said the company will now evaluate the tariff announcement.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

September 26, 2025 04:59 ET (08:59 GMT)