European auto shares hit by retaliation fears after EU tariffs on Chinese EVs

Shares in some of Europe's biggest automakers dropped on Wednesday on fears of Chinese retaliation after the European Commission said it would impose duties on imported Chinese electric vehicles, reports Reuters.
The Commission said it would apply provisional duties of up to 38.1 per cent on the Chinese imports - a move European manufacturers have long warned against, fearing it could impact their sales in China, the world's biggest auto market.
"The tariffs have turned out to be lower than many feared and are initially a plan that can still be revised. The measures are a disaster for European car buyers and for German car manufacturers," said Frank Schwope, automotive industry lecturer at the University of Applied Sciences FHM Hannover.
"China is by far the most important sales market for all German car manufacturers. However, French car manufacturers, for whom China is an insignificant market, would benefit from measures against Chinese imports to Europe," Schwope added.
The STOXX carmakers index as last down 0.4 per cent, having earlier fallen as much as 1.6 per cent.
Volkswagen and BMW down around 1-1.8 per cent, were among the worst performers on Germany's blue-chip index. Luxury German manufacturer Porsche Holding was down over 7 per cent as it traded ex-dividend.
However, shares in French group Renault and Franco-Italian-American group Stellantis turned positive in mid-session trade.
Jefferies analyst Philippe Houchois said German carmakers were getting hit by the "fear of retaliation".
Adding to the pressure was news of possible lawsuits in Britain over allegations of emissions test cheating that could cost companies over $7.5 billion.
On Tuesday, spokespeople for Mercedes Benz and U.S. carmaker Ford said they saw "no merit" in the claims.