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Shares of Japanese automakers, South Korean chipmakers fall on escalating trade fears

Key Points
  • Shares of Japanese automakers with production facilities based in the U.S. dived in response to additional tariffs announced by both U.S. and China.
  • South Korean semiconductors, already hit by worsening trade tensions with Japan, also fell in early trade on Monday.
Line workers begin installing the interior and electronics on the flex line at Nissan Motor Co's automobile manufacturing plant in Smyrna, Tennessee.
William DeShazer | Reuters

Japanese auto stocks as well as South Korean semiconductor shares plummeted on Monday, on the back of escalating trade tensions.

China said Friday it would impose new tariffs on $75 billion worth of American goods. Beijing also announce it would resume 25% duties on U.S. autos, and a further 5% on auto parts and components — those will go into effect on Dec. 15. China had paused those auto tariffs in April.

In retaliation, U.S. President Donald Trump said Friday he'll hike tariff rates on most imports from China.

Shares of Japanese automakers with production facilities based in the U.S. dived in response.

Nissan and Toyota fell more than 2% in early trade, while Mitsubishi Motors plummeted more than 3%, and Honda dropped nearly 3% initially — but those shares have since recovered slightly. 

Japanese automakers — including Nissan, Toyota, Mitsubishi, Honda, Mazda and Subaru — have 24 manufacturing plants, 45 research and development design facilities, and 39 distribution centers across 28 states in the U.S., according to data from the Japanese Automobile Manufacturers Association.

Together, Japanese vehicle makers build more than a third of vehicles produced in the U.S., according to the data.

Autos are among the top U.S. exports to China, forming around 19% of global U.S. vehicle exports in 2017. In 2018, roughly 230,000 American-produced vehicles were sold in China.

South Korean semiconductors, already hit by worsening trade tensions with Japan, also fell in early trade on Monday.

Chipmaker Samsung Electronics fell nearly 1.5% while its rival SK Hynix plunged 3.36%.

South Korean trade is heavily dependent on China and the U.S., as the country is closely interlinked in the supply chains between the two giants. Semiconductors are the main intermediate product exported by South Korea.